UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2016~~March 31, 2017

Commission File Number: 001-33480

CLEAN ENERGY FUELS CORP.

(Exact name of registrant as specified in its charter)



Delaware		33-0968580
(State or other jurisdiction of incorporation)		(IRS Employer Identification No.)

4675 MacArthur Court, Suite 800, Newport Beach, CA 92660

(Address of principal executive offices, including zip code)

(949) 437-1000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232,405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” ~~and~~ “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer o		Accelerated filer x

Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

		Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). Yes o No x

As of ~~October~~April 27, ~~2016,~~2017, there were ~~136,840,598~~150,496,403 shares of the registrant’s common stock, par value $0.0001 per share, issued and outstanding.

CLEAN ENERGY FUELS CORP. AND SUBSIDIARIES

INDEX

Table of Contents

PART I.—FINANCIAL INFORMATION

Item 1.—Financial Statements (Unaudited)

Clean Energy Fuels Corp. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share data, Unaudited)


	December 31, 2015			September 30, 2016			December 31, 2016			March 31, 2017
Assets
Current assets:
Cash and cash equivalents	$	43,724		$	41,555		$	36,119		$	47,125
Restricted cash	4,240			4,629			6,996			253
Short-term investments	102,944			77,313			73,718			50,803
Accounts receivable, net of allowance for doubtful accounts of $1,895 and $2,343 as of December 31, 2015 and September 30, 2016, respectively	73,645			72,949
Accounts receivable, net of allowance for doubtful accounts of $1,063 and $1,006 as of December 31, 2016 and March 31, 2017, respectively							79,432			68,123
Other receivables	60,667			28,564			21,934			19,861
Note receivable							—			123,487
Inventory	29,289			29,455			29,544			28,711
Prepaid expenses and other current assets	14,657			15,191			14,021			12,656
Total current assets	329,166			269,656			261,764			351,019
Land, property and equipment, net	516,324			487,922			483,923			433,317
Notes receivable and other long-term assets, net	14,732			16,981			16,377			15,244
Investments in other entities	5,695			2,644			3,475			2,606
Goodwill	91,967			93,848			93,018			66,777
Intangible assets, net	42,644			40,303			38,700			37,496
Total assets	$	1,000,528		$	911,354		$	897,257		$	906,459
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of debt and capital lease obligations	$	149,856		$	4,851		$	5,943		$	4,132
Accounts payable	26,906			23,106			23,637			17,220
Accrued liabilities	59,082			54,267			52,601			53,694
Deferred revenue	10,549			8,544			7,041			7,212
Total current liabilities	246,393			90,768			89,222			82,258
Long-term portion of debt and capital lease obligations	352,294			282,769			241,433			211,251
Long-term debt, related party	65,000			65,000			65,000			40,000
Other long-term liabilities	7,896			8,168			7,915			5,338
Total liabilities	671,583			446,705			403,570			338,847
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value. Authorized 1,000,000 shares; issued and outstanding no shares	—			—			—			—
Common stock, $0.0001 par value. Authorized 224,000,000 shares; issued and outstanding 92,382,717 shares and 134,235,058 shares at December 31, 2015 and September 30, 2016, respectively	9			13
Common stock, $0.0001 par value. Authorized 224,000,000 shares; issued and outstanding 145,538,063 shares and 149,722,174 shares at December 31, 2016 and March 31, 2017, respectively							15			15
Additional paid-in capital	915,199			1,055,211			1,090,361			1,103,124
Accumulated deficit	(591,683		)	(599,953		)	(603,836		)	(543,273		)
Accumulated other comprehensive loss	(20,973		)	(15,698		)	(17,675		)	(16,741		)
Total Clean Energy Fuels Corp. stockholders’ equity	302,552			439,573			468,865			543,125
Noncontrolling interest in subsidiary	26,393			25,076			24,822			24,487
Total stockholders’ equity	328,945			464,649			493,687			567,612
Total liabilities and stockholders’ equity	$	1,000,528		$	911,354		$	897,257		$	906,459

See accompanying notes to condensed consolidated financial statements.

Clean Energy Fuels Corp. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except share and per share data, Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2015			2016			2015			2016			2016			2017
Revenue:
Product revenues	$	77,355		$	84,456		$	222,396		$	263,179
Service revenues	14,902			12,561			42,577			37,645
Total revenues	92,257			97,017			264,973			300,824
Product revenue													$	83,992		$	76,229
Service revenue													11,790			13,262
Total revenue													95,782			89,491
Operating expenses:
Cost of sales (exclusive of depreciation and amortization shown separately below):
Product cost of sales	59,313			55,481			174,079			170,746			53,371			54,597
Service cost of sales	7,410			6,377			21,163			19,095			5,884			6,264
Gain from change in fair value of derivative warrants	(502		)	(26		)	(1,085		)	(25		)
Selling, general and administrative	27,800			25,914			87,027			76,769			25,595			23,773
Depreciation and amortization	14,000			14,801			40,288			44,682			14,961			15,317
Total operating expenses	108,021			102,547			321,472			311,267			99,811			99,951
Operating loss	(15,764		)	(5,530		)	(56,499		)	(10,443		)	(4,029		)	(10,460		)
Gain (loss) from extinguishment of debt, net	—			(668		)	—			25,375
Interest expense, net	(10,152		)	(6,283		)	(30,020		)	(23,264		)
Interest expense													(9,301		)	(4,911		)
Interest income													141			192
Other income (expense), net	2,648			(109		)	3,512			(6		)	250			(167		)
Loss from equity method investments	(154		)	(13		)	(703		)	(20		)	(74		)	(36		)
Loss before income taxes	(23,422		)	(12,603		)	(83,710		)	(8,358		)
Gain from extinguishment of debt													15,923			3,195
Gain from sale of certain assets of subsidiary													—			70,648
Income before income taxes													2,910			58,461
Income tax benefit (expense)	241			(416		)	(1,353		)	(1,229		)	(381		)	2,263
Net loss	(23,181		)	(13,019		)	(85,063		)	(9,587		)
Loss from noncontrolling interest	62			391			835			1,317
Net loss attributable to Clean Energy Fuels Corp.	$	(23,119	)	$	(12,628	)	$	(84,228	)	$	(8,270	)
Loss per share attributable to Clean Energy Fuels Corp.:
Net income													2,529			60,724
Loss attributable to noncontrolling interest													299			335
Net income attributable to Clean Energy Fuels Corp.													$	2,828		$	61,059
Income per share:
Basic	$	(0.25	)	$	(0.10	)	$	(0.92	)	$	(0.07	)	$	0.03		$	0.41
Diluted	$	(0.25	)	$	(0.10	)	$	(0.92	)	$	(0.07	)	$	0.03		$	0.40
Weighted-average common shares outstanding:
Basic	91,561,613			130,436,038			91,454,117			112,819,041			97,178,768			148,847,503
Diluted	91,561,613			130,436,038			91,454,117			112,819,041			99,821,844			152,972,153

See accompanying notes to condensed consolidated financial statements.

Clean Energy Fuels Corp. and Subsidiaries

Condensed Consolidated Statements of Comprehensive ~~Loss~~Income

(In thousands, Unaudited)

Clean Energy Fuels Corp. Noncontrolling Interest Total
Three Months Ended
September 30, Three Months Ended
September 30, Three Months Ended
September 30,
2015 2016 2015 2016 2015 2016
Net loss $ (23,119 ) $ (12,628 ) $ (62 ) $ (391 ) $ (23,181 ) $ (13,019 )

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of $0 tax in 2015 and 2016 (1,230 ) (449 ) —
—
(1,230 ) (449 )
Foreign currency adjustments on intra-entity long-term investments, net of $0 tax in 2015 and 2016 (5,597 ) (885 ) —
—
(5,597 ) (885 )
Unrealized gains (losses) on available-for-sale securities, net of $0 tax in 2015 and 2016 27
(11 ) —
—
27
(11 )
Total other comprehensive income (loss) (6,800 ) (1,345 ) —
—
(6,800 ) (1,345 )
Comprehensive loss $ (29,919 ) $ (13,973 ) $ (62 ) $ (391 ) $ (29,981 ) $ (14,364 )



	Clean Energy Fuels Corp.						Noncontrolling Interest						Total
	Three Months Ended March 31,						Three Months Ended March 31,						Three Months Ended March 31,
	2016			2017			2016			2017			2016			2017
Net income	$	2,828		$	61,059		$	(299	)	$	(335	)	$	2,529		$	60,724

Other comprehensive income, net of tax:
Foreign currency translation adjustments, net of $0 tax in 2016 and 2017	6,515			360			—			—			6,515			360
Foreign currency adjustments on intra-entity long-term investments, net of $0 tax in 2016 and 2017	(635		)	579			—			—			(635		)	579
Unrealized gains (losses) on available-for-sale securities, net of $0 tax in 2016 and 2017	67			(5		)	—			—			67			(5		)
Total other comprehensive income	5,947			934			—			—			5,947			934
Comprehensive income	$	8,775		$	61,993		$	(299	)	$	(335	)	$	8,476		$	61,658

Clean Energy Fuels Corp. Noncontrolling Interest Total
Nine Months Ended
September 30, Nine Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016 2015 2016
Net loss $ (84,228 ) $ (8,270 ) $ (835 ) $ (1,317 ) $ (85,063 ) $ (9,587 )

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of $0 tax in 2015 and 2016 (6,098 ) 2,185
—
—
(6,098 ) 2,185
Foreign currency adjustments on intra-entity long-term investments, net of $0 tax in 2015 and 2016 (8,373 ) 3,024
—
—
(8,373 ) 3,024
Unrealized gains (losses) on available-for-sale securities, net of $0 tax in 2015 and 2016 41
66
—
—
41
66
Total other comprehensive income (loss) (14,430 ) 5,275
—
—
(14,430 ) 5,275
Comprehensive loss $ (98,658 ) $ (2,995 ) $ (835 ) $ (1,317 ) $ (99,493 ) $ (4,312 )

See accompanying notes to condensed consolidated financial statements.

Clean Energy Fuels Corp. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands, Unaudited)


	Nine Months Ended September 30,						Three Months Ended March 31,
	2015			2016			2016			2017
Cash flows from operating activities:
Net loss	$	(85,063	)	$	(9,587	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Net income							$	2,529		$	60,724
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	40,288			44,682			14,961			15,317
Provision for doubtful accounts, notes and inventory	2,636			2,504			665			409
Stock-based compensation expense	8,009			6,533			2,419			1,910
Gain on extinguishment of debt, net	—			(25,375		)
Amortization of debt issuance cost	2,296			1,217			467			240
Accretion of notes payable	48			—
Gain on sale of subsidiary	(937		)	—
Gain on extinguishment of debt							(15,923		)	(3,195		)
Gain from sale of certain assets of subsidiary							—			(70,648		)
Changes in operating assets and liabilities:
Accounts and other receivables	41,151			31,134			35,935			18,604
Inventory	3,915			(1,043		)	(748		)	162
Prepaid expenses and other assets	6,763			(178		)	(794		)	1,400
Restricted cash							(5,122		)	—
Accounts payable	(11,325		)	(940		)	(3,483		)	(7,439		)
Accrued expenses and other	(8,792		)	(4,702		)	(4,139		)	(16,084		)
Net cash provided by (used in) operating activities	(1,011		)	44,245
Net cash provided by operating activities							26,767			1,400
Cash flows from investing activities:
Purchases of short-term investments	(101,300		)	(88,660		)	(39,783		)	(30,720		)
Maturities and sales of short-term investments	108,561			113,852			66,894			53,517
Purchases and deposits on property and equipment	(40,230		)	(16,663		)	(5,246		)	(7,579		)
Loans made to customers	(3,885		)	(2,326		)	(849		)	(784		)
Payments on and proceeds from sales of loans receivable	997			575			234			319
Cash received with sale of subsidiary	1,118			—
Restricted cash	2,141			(267		)	587			1,342
Capital from equity method investment	—			3,031
Net cash provided by (used in) investing activities	(32,598		)	9,542
Cash received from sale of certain assets of subsidiary, net of cash transferred							—			28,993
Investments in other entities							—			(1,928		)
Net cash provided by investing activities							21,837			43,160
Cash flows from financing activities:
Issuances of common stock	602			68,867			22,052			10,767
Fees paid for issuances of common stock	(795		)	(1,340		)	(680		)	(46		)
Proceeds from debt instruments	372			2,460			306			6,291
Proceeds from revolving line of credit	27			50,008			50,003			—
Repayment of borrowing under revolving line of credit	(62		)	(50,014		)	(4		)	(23,500		)
Repayment of capital lease obligations and debt instruments	(4,425		)	(127,213		)	(77,892		)	(27,250		)
Net cash used in financing activities	(4,281		)	(57,232		)	(6,215		)	(33,738		)
Effect of exchange rates on cash and cash equivalents	(2,648		)	1,276			1,126			184
Net decrease in cash and cash equivalents	(40,538		)	(2,169		)
Net increase in cash and cash equivalents							43,515			11,006
Cash and cash equivalents, beginning of period	92,381			43,724			43,724			36,119
Cash and cash equivalents, end of period	$	51,843		$	41,555		$	87,239		$	47,125
Supplemental disclosure of cash flow information:
Income taxes paid	$	649		$	1,176		$	196		$	54
Interest paid, net of approximately $712 and $363 capitalized, respectively	24,425			21,275
Interest paid, net of approximately $135 and $35 capitalized, respectively							6,505			3,324

See accompanying notes to condensed consolidated financial statements.

Clean Energy Fuels Corp. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(In thousands, except share and per share data, Unaudited)

Note 1—General

Nature of Business Clean Energy Fuels Corp., together with its majority and wholly owned subsidiaries (hereinafter collectively referred to as the ~~“Company,”~~"Company," unless the context or the use of the term indicates or requires otherwise), is engaged in the business of selling natural gas as an alternative fuel for vehicle fleets and related natural gas fueling solutions to its customers, primarily in the United States and Canada.

The Company's principal business is supplying compressed natural gas (“CNG”), liquefied natural gas (“LNG”) and renewable natural gas ~~that~~("RNG") (which can be delivered in the form of CNG or ~~LNG ("RNG")~~LNG) for light, medium and heavy-duty vehicles and providing operation and maintenance ("O&M") services for natural gas fueling stations. As a comprehensive solution provider, the Company also designs, builds, operates, and maintains fueling stations; manufactures, sells and services non-lubricated natural gas fueling compressors and other equipment used in CNG stations and LNG stations; offers assessment, design and modification solutions to provide operators with code-compliant service and maintenance facilities for natural gas vehicle fleets; transports and sells CNG and LNG to industrial and institutional energy users who do not have direct access to natural gas pipelines; ~~processes~~procures and sells RNG; sells tradable credits it generates by selling natural gas and RNG as a vehicle fuel, including credits under the California and the Oregon Low Carbon Fuel Standards (collectively, "LCFS Credits") and Renewable Identification Numbers ("RIN Credits" or "RINs") under the federal Renewable Fuel Standard Phase 2; helps its customers acquire and finance natural gas vehicles; and obtains federal, state and local ~~tax~~ credits, grants and incentives.

Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations, comprehensive ~~loss~~income and cash flows as of and for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~2016.~~2017. All intercompany accounts and transactions have been eliminated in consolidation. The three ~~and nine~~ month periods ended ~~September 30, 2015~~March 31, 2016 and ~~2016~~2017 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2016~~2017 or for any other interim period or for any future year.

Certain information and disclosures normally included in the notes to the financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), but the resultant disclosures contained herein are in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) as they apply to interim reporting. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, ~~2015~~2016 that are included in the Company’s Annual Report on Form 10-K filed with the SEC on March ~~3, 2016.~~7, 2017.

Reclassifications Certain prior period ~~items and amounts, including certain~~ line items ~~in accrued liabilities in Note 9 and~~ in the condensed consolidated ~~statement~~statements of operations and condensed consolidated statements of cash flows have been reclassified to conform to the classifications used to prepare the condensed consolidated financial statements for the period ended ~~September 30, 2016.~~March 31, 2017. These reclassifications had no material impact on the Company’s financial position, results of operations, or cash flows as previously reported.

~~During the three months ended March 31, 2016, the Company adopted Accounting Standards Update ("ASU") No. 2015-03,~~ ~~Interest - Imputation of Interest~~, which requires that debt issuance costs be presented in the balance sheet as a deduction from the carrying amount of the related liability, rather than as a deferred charge. The standard is required to be applied on a retrospective basis. As a result of applying the standard, unamortized debt issuance costs of $273 were reclassified from Prepaid expenses and other current assets to Current portion of long-term debt and capital lease obligations and $4,991 were reclassified from Notes receivable and other long-term assets to Long-term debt and capital lease obligations as of December 31, 2015.

Use of Estimates The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect ~~the~~ the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates and may result in material effects on the Company’s operating results and financial position.

~~Revenue Recognition~~ Beginning January 1, 2016, the Company began using the percentage of completion method to recognize revenue for station construction projects using the cost-to-cost method. Under this method, the Company estimates the percentage of completion of a project based on the costs incurred to date for the associated contract in comparison to the estimated total costs for such contract at completion. Historically, the Company recognized revenue on station construction projects using the completed-contract method because it did not have a reliable means to make estimates of the percentage of the contract

completed. Under the completed contract method, the construction projects were considered substantially complete at the earlier of customer acceptance of the fueling station or the time when fuel dispensing activities at the station began. The sale of compressors and related equipment continues to be recognized under the percentage of completion method as in previous periods.

Effective January 1, 2016, the Company implemented a cost tracking system that provides for a detailed tracking of costs incurred on its station construction projects on a project by project basis. The Company also changed related accounting activities and processes to timely identify and monitor costs. As a result of this implementation, the Company is able to make reliable estimates as to the percentage of a project that is complete at the end of each reporting period.

Station construction contracts are generally short-term, except for certain larger and more complex stations, which can take up to 24 months to complete. Management evaluates the performance of contracts on an individual contract basis. Contract price and cost estimates are reviewed periodically as work progresses and adjustments proportionate to the percentage of completion are reflected in contract revenues in the reporting period when such estimates are revised.

The nature of accounting for contracts is such that refinements of estimates to account for changing conditions and new developments are continuous and characteristic of the process. Many factors that can affect contract profitability may change during the performance period of a contract, including differing site conditions, the availability of skilled contract labor, the performance of major suppliers and subcontractors, and unexpected changes in material costs. Changes to these factors may result in revisions to costs and income, which are recognized in the period in which the revisions become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses become known. During the nine months ended September 30, 2016, there were no significant losses on open contracts.

The Company considers unapproved change orders to be contract variations for which the customer has approved the change of scope but an agreement has not been reached as to an associated price change. Change orders that are unapproved as to both price and scope are evaluated as claims. Claims have historically been insignificant. There were no significant unapproved change orders, claims, contract penalties, settlements or changes in contract estimates during the nine months ended September 30, 2016.

As a result of using the percentage of completion method to recognize revenues, revenue and operating income from station construction sales during the three months ended September 30, 2016 were lower by $3,764 and $310, respectively, than would have been recognized during the period under the completed contract method. There was no impact on the income per diluted share. During the nine months ended September 30, 2016, revenue and operating income from station construction sales were higher by $14,083 and $1,864, respectively, than would have been recognized during the period under the completed contract method. Income per diluted share was $0.02 higher than what would have been reported.

Note 2— ~~Investments in Other Entities~~Acquisitions and ~~Noncontrolling Interest in a Subsidiary~~

~~MCEP~~Divestitures

On ~~September 16, 2014,~~February 27, 2017, Clean Energy Renewable Fuels ("Renewables"), a subsidiary of the Company, ~~formed~~entered into an asset purchase agreement (the “APA”) with BP Products North America, Inc. (“BP”), pursuant to which Renewables agreed to sell to BP certain assets relating to its RNG production business (the “Asset Sale”), consisting of Renewables’ two existing RNG production facilities, Renewables’ interest in the RNG Ventures and Renewables’ third-party RNG supply contracts (the “Assets”). The Asset Sale was completed on March 31, 2017 for a ~~joint venture with Mansfield Ventures LLC (“Mansfield”) called Mansfield Clean Energy Partners LLC (“MCEP”)~~sale price of $155,511, plus BP assumed the obligations under the Canton Bonds (as defined in Note 12), which totaled $8,820 as of March 31, 2017.

On March 31, 2017 BP paid Renewables $30,000 in cash and delivered to Renewables a promissory note with a principal amount of $123,487 (the promissory note was paid in full on April 3, 2017). In addition, BP is ~~designed~~obligated to ~~provide natural gas fueling solutions~~pay Renewables $2,024 related to ~~bulk fuel haulers~~the determination of certain post-closing adjustments. As defined in the ~~United States. The Company~~APA, the valuation date of the Asset Sale was January 1, 2017, and ~~Mansfield each have~~as such the APA included certain adjustments to the purchase price to reflect a ~~50% ownership interest~~determination of the amount

of cash accumulated by Renewables from the valuation date to the closing date, net of permitted cash outflows. Control of the Assets was not transferred until the Asset Sale was completed on March 31, 2017. Accordingly, the full operating results of Renewables are included in ~~MCEP. The Company accounts for its interest using~~ the ~~equity method~~condensed consolidated statement of ~~accounting, as the Company has the ability to exercise significant influence over MCEP’s operations. The Company recorded a loss from this investment of $154 and $13~~operations for the three months ended ~~September 30, 2015 and 2016, respectively. The Company recorded a loss from this investment of $703 and $20 for~~March 31, 2017.

In addition, under the ~~nine months ended September 30, 2015 and 2016, respectively. Additionally, during~~APA, BP is required, following the nine months ended September 30, 2016, the Company received a return of capital of $3,031 with no change in ownership interest. The Company has an investment balance of $4,695 and $1,644 at December 31, 2015 and September 30, 2016, respectively.

~~NG Advantage~~

~~The Company viewed the acquisition as a strategic investment in the expansion~~closing of the ~~Company’s initiative~~Asset Sale, to ~~deliver natural gas~~pay Renewables up to ~~industrial and institutional energy users. The results of NG Advantage’s operations have been included~~an additional $25,000 in cash over a five-year period if certain performance criteria relating to the ~~Company’s consolidated financial statements since October 14, 2014.~~Assets are met.

The Company ~~recorded a loss~~incurred $3,695 in transaction fees in connection with the Asset Sale, and subsequent to March 31, 2017, the Company paid $8,605 in cash and issued 770,269 shares valued at $1,964, of the Company's common stock to holders of options to purchase membership units in Renewables. The net proceeds from the ~~noncontrolling interest~~Asset Sale were $143,211. The BP Note delivered to Renewables in connection with the Asset Sale was excluded from the Company's condensed consolidated statement of ~~$62~~cash flows as it is a non-cash investing activity.

Following completion of the Asset Sale, Renewables and ~~$391~~the Company are continuing to procure RNG from BP under a long-term supply contract and from other RNG suppliers, and resell such RNG through the Company's natural gas fueling infrastructure as Redeem™, the Company's RNG vehicle fuel. The Company also collects royalties from BP on gas purchased from BP and sold as Redeem at the Company's stations, which royalty is in addition to any payment obligation of BP under the APA.

The Asset Sale resulted in a total gain of $70,648 that was recorded in gain from sale of certain assets of subsidiary in the Company's condensed consolidated statement of operations for the three months ended ~~September 30, 2015~~March 31, 2017. Included in the determination of the total gain is goodwill of $26,576 that was allocated to the disposed assets based on the relative fair values of the assets disposed and ~~2016, respectively and $835 and $1,317 for~~ the ~~nine months ended September 30, 2015 and 2016, respectively.~~ portion of the reporting unit that was retained.

The ~~noncontrolling interest~~Company determined that the Asset Sale did not meet the definition of a discontinued operation because the disposal did not represent a significant disposal nor was ~~$26,393 and $25,076 at December 31, 2015 and September 30, 2016, respectively.~~the disposal a strategic shift in the Company's strategy.

Note 3—Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less on the date of acquisition to be cash equivalents. The Company places its cash and cash equivalents with high credit quality financial institutions.

At times, such investments may be in excess of the Federal Deposit Insurance Corporation (“FDIC”), Canadian Deposit Insurance Corporation (“CDIC”) and other foreign insurance limits. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. The amounts in excess of FDIC, CDIC and other foreign insurance limits were approximately ~~$40,691~~$34,439 and ~~$39,306~~$44,963 at December 31, ~~2015~~2016 and ~~September 30, 2016,~~March 31, 2017, respectively.

Note 4—Restricted Cash

The Company classifies restricted cash as short-term and a current asset if the cash is expected to be used in operations within a year or to acquire a current asset. Otherwise, the restricted cash is classified as long-term. Short-term restricted cash at December 31, ~~2015~~2016 and ~~September 30, 2016~~March 31, 2017 consisted of the following:


	December 31, 2015		September 30, 2016		December 31, 2016		March 31, 2017
Short-term restricted cash:
Standby letters of credit	$	1,631	$	1,753	$	1,753	$	253
Canton Bonds (see Note 10)	2,609		2,876
Canton Bonds (see Note 12)					3,665		—
Held in escrow					1,578		—
Total short-term restricted cash	$	4,240	$	4,629	$	6,996	$	253

Note 5—Investments

Available-for-sale securities are carried at fair value, inclusive of unrealized gains and losses. Unrealized gains and losses are included in other comprehensive income (loss) net of applicable income taxes. Gains or losses on sales of available-for-sale securities are recognized on the specific identification basis. All of the ~~Company’s~~Company's short-term investments are classified as available-for-sale securities.

The Company reviews available-for-sale securities for other-than-temporary declines in fair value below their cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. This evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below its

cost basis and adverse conditions related specifically to the security, including any changes to the credit rating of the security. As of ~~September 30, 2016,~~March 31, 2017, the Company believes its carrying values for its available-for-sale securities are properly recorded.

Short-term investments atas of December 31, ~~2015 consisted of the following:~~

Amortized Cost
Gross Unrealized
Losses

Estimated Fair
Value
Municipal bonds and notes $ 16,797
$ (7 ) $ 16,790
Zero coupon bonds 500
(1 ) 499
Corporate bonds 37,181
(77 ) 37,104
Certificate of deposits 48,551
—
48,551
Total short-term investments $ 103,029
$ (85 ) $ 102,944

~~Short-term investments at September 30,~~ 2016 consisted of the following:


	Amortized Cost		Gross Unrealized Gains (Losses)			Estimated Fair Value		Amortized Cost		Gross Unrealized Losses			Estimated Fair Value
Municipal bonds and notes	$	14,466	$	(4	)	$	14,462	$	8,791	$	(4	)	$	8,787
Zero coupon bonds	429		—			429
Corporate bonds	15,736		(14		)	15,722		21,517		(7		)	21,510
Certificate of deposits	46,700		—			46,700		43,421		—			43,421
Total short-term investments	$	77,331	$	(18	)	$	77,313	$	73,729	$	(11	)	$	73,718

~~Note 6—Other Receivables~~

~~Other receivables at December~~Short-term investments as of March 31, ~~2015 and September 30, 2016~~2017 consisted of the following:

December 31,
2015 September 30,
2016
Loans to customers to finance vehicle purchases $ 10,531
$ 9,070
Accrued customer billings 7,106
9,985
Fuel tax credits 40,730
6,275
Other 2,300
3,234
Total other receivables $ 60,667
$ 28,564



	Amortized Cost		Gross Unrealized Gains (Losses)			Estimated Fair Value
Municipal bonds and notes	$	9,124	$	(1	)	$	9,123
Corporate bonds	14,540		(3		)	14,537
Certificate of deposits	27,143		—			27,143
Total short-term investments	$	50,807	$	(4	)	$	50,803

Note 6—Fair Value Measurements

The Company follows the authoritative guidance for fair value measurements with respect to assets and liabilities that are measured at fair value on a recurring basis and non-recurring basis. Under the standard, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as of the measurement date. The standard also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy consists of the following three levels: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly; Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

As of March 31, 2017, the Company's financial instruments consisted of available-for-sale securities, liability-classified warrants, and debt instruments. The Company’s available-for-sale securities are classified within Level 2 because they are valued using the most recent quoted prices for identical assets in markets that are not active and quoted prices for similar assets in active markets. The liability-classified warrants are classified within Level 3 because the Company uses the Black-Scholes option pricing model to estimate the fair value based on inputs that are not observable in any market. The fair values of the Company's debt instruments approximated their carrying values as of December 31, 2016 and March 31, 2017. See Note 12 for further information about the Company's debt instruments. There were no transfers of assets between Level 1, Level 2, or Level 3 of the fair value hierarchy as of December 31, 2016 and March 31, 2017, respectively.

The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2016 and March 31, 2017, respectively:



Description	Balance at December 31, 2016		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities(1):
Municipal bonds and notes	$	8,787	$	—	$	8,787	$	—
Corporate bonds	21,510		—		21,510		—
Certificate of deposits	43,421		—		43,421		—
Liabilities:
Warrants(2)	581		—		—		581



Description	Balance at March 31, 2017		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities(1):
Municipal bonds and notes	$	9,123	$	—	$	9,123	$	—
Corporate bonds	14,537		—		14,537		—
Certificate of deposits	27,143		—		27,143		—
Liabilities:
Warrants(2)	593		—		—		593

(1) Included in short-term investments in the condensed consolidated balance sheets. See Note 5 for further information.

(2) Included in accrued liabilities and other long-term liabilities in the condensed consolidated balance sheets.

Non-Financial Assets

No impairments of long-lived assets measured at fair value on a non-recurring basis have been incurred during the three months ended March 31, 2016 and 2017. The Company’s use of these non-financial assets does not differ from their highest and best use as determined from the perspective of a market participant.

Note 7—Other Receivables

Other receivables as of December 31, 2016 and March 31, 2017 consisted of the following:



	December 31, 2016		March 31, 2017
Loans to customers to finance vehicle purchases	$	7,416	$	7,702
Accrued customer billings	4,308		6,978
Fuel tax credits	6,358		—
Other	3,852		5,181
Total other receivables	$	21,934	$	19,861

Note 8—Inventory

Inventory consists of raw materials and spare parts, work in process and finished goods and is stated at the lower of cost (first-in, first-out) or market. The Company writes down the carrying value of its inventory to net realizable value for estimated obsolescence or unmarketable inventory in an amount equal to the difference between the cost of inventory and its estimated realizable value based upon assumptions about future demand and market conditions, among other factors.

Inventories atas of December 31, ~~2015~~2016 and ~~September 30, 2016~~March 31, 2017 consisted of the following:


	December 31, 2015		September 30, 2016		December 31, 2016		March 31, 2017
Raw materials and spare parts	$	25,113	$	23,941	$	24,843	$	22,849
Work in process	973		2,195		845		2,634
Finished goods	3,203		3,319		3,856		3,228
Total inventories	$	29,289	$	29,455	$	29,544	$	28,711

Note 8—9—Land, Property and Equipment

Land, property and equipment atas of December 31, ~~2015~~2016 and ~~September 30, 2016~~March 31, 2017 consisted of the following:


	December 31, 2015			September 30, 2016			December 31, 2016			March 31, 2017
Land	$	2,858		$	2,858		$	2,858		$	2,858
LNG liquefaction plants	94,634			94,634			94,634			94,634
RNG plants(1)	46,397			47,154			47,545			—
Station equipment	316,258			333,440			341,605			321,269
Trailers	50,414			51,730			54,985			57,357
Other equipment	83,687			90,762			93,118			93,873
Construction in progress	139,586			124,199			117,662			118,576
	733,834			744,777			752,407			688,567
Less: accumulated depreciation	(217,510		)	(256,855		)	(268,484		)	(255,250		)
Total land, property and equipment	$	516,324		$	487,922
Total land, property and equipment, net							$	483,923		$	433,317

(1) The RNG plants were sold in connection with the Asset Sale (See Note 2 for further information).

Included in land, property and equipment are capitalized software costs of ~~$22,886~~$25,728 and ~~$24,872 at~~$25,791 as of December 31, ~~2015~~2016 and ~~September 30, 2016,~~March 31, 2017, respectively. The accumulated amortization onof the capitalized software costs is ~~$13,793~~$17,237 and ~~$16,402 at~~$18,109 as of December 31, ~~2015~~2016 and ~~September 30, 2016,~~March 31, 2017, respectively.

The Company recorded amortization expense related to the capitalized software costs of ~~$692~~$938 and ~~$824~~$872 during the three months ended ~~September 30, 2015~~March 31, 2016 and ~~2016, respectively, and $2,239 and $2,609 during the nine months ended September 30, 2015 and 2016,~~2017, respectively.

~~At September 30, 2015~~As of March 31, 2016 and ~~2016, $6,249~~2017, $6,077 and ~~$4,139,~~$2,884, respectively, are included in accounts payable and accrued liabilities balances, which amounts are related to purchases of property and equipment. These amounts are excluded from the condensed consolidated statements of cash flows as they are non-cash investing activities.

Note 9—10— Investments in Other Entities and Noncontrolling Interest in a Subsidiary

RNG Ventures

In November 2016, Renewables entered into agreements to form joint ventures with Aria Energy Operating LLC ("Aria"), a developer of RNG production facilities, to develop RNG production facilities at a Republic Services landfill in Oklahoma City, Oklahoma and an Advanced Disposal landfill near Atlanta, Georgia. These joint ventures are referred to as the "RNG Ventures." Renewables' interest in the RNG Ventures was transferred to BP upon completion of the Asset Sale; however, Renewables retained the right to purchase 100% of the RNG that will be produced by the production facilities to be developed by the RNG Ventures for the vehicle fuels market. The Company accounted for its interest in the RNG Ventures using the equity method of accounting as the Company had the ability to exercise significant influence over these operations. The Company had an investment balance of $833 and $0 in the RNG Ventures as of December 31, 2016 and March 31, 2017, respectively. See Note 2 for further information.

MCEP

On September 16, 2014, the Company formed a joint venture with Mansfield Ventures LLC (“Mansfield”) called Mansfield Clean Energy Partners LLC (“MCEP”), which is designed to provide natural gas fueling solutions to bulk fuel haulers in the United States. The Company and Mansfield each have a 50% ownership interest in MCEP. The Company accounts for its interest in MCEP using the equity method of accounting, as the Company has the ability to exercise significant influence over MCEP’s operations. The Company recorded a loss from this investment of $74 and $36 for the three months ended March 31,

2016 and 2017, respectively. Additionally, on June 28, 2016, the Company received a return of capital of $3,031 with no change in ownership interest. The Company has an investment balance of $1,642 and $1,606 at December 31, 2016 and March 31, 2017, respectively.

NG Advantage

On October 14, 2014, the Company entered into a Common Unit Purchase Agreement (“UPA”) with NG Advantage, LLC (“NG Advantage”) for a 53.3% controlling interest in NG Advantage. NG Advantage is engaged in the business of transporting CNG in high-capacity trailers to industrial and institutional energy users, such as hospitals, food processors, manufacturers and paper mills that do not have direct access to natural gas pipelines. The Company viewed the acquisition as a strategic investment in the expansion of the Company’s initiative to deliver natural gas to industrial and institutional energy users. The results of NG Advantage’s operations have been included in the Company’s consolidated financial statements since October 14, 2014.

The Company recorded a loss from the noncontrolling interest in NG Advantage of $299 and $335 for the three months ended March 31, 2016 and 2017, respectively. The noncontrolling interest was $24,822 and $24,487 as of December 31, 2016 and March 31, 2017, respectively.

Note 11—Accrued Liabilities

Accrued liabilities atas of December 31, ~~2015~~2016 and ~~September 30, 2016~~March 31, 2017 consisted of the following:


	December 31, 2015		September 30, 2016		December 31, 2016		March 31, 2017
Accrued alternative fuel incentives (1)	$	15,651	$	12,653
Accrued alternative fuels incentives (1)					$	9,840	$	10,158
Accrued employee benefits	3,042		3,534		4,317		3,308
Accrued interest	3,718		4,952		1,849		2,957
Accrued gas and equipment purchases	14,133		12,126		11,657		10,976
Accrued property and other taxes	5,344		3,850		4,572		3,808
Salaries and wages	9,537		9,478		12,293		4,665
Other(2)	7,657		7,674		8,073		17,822
Total accrued liabilities	$	59,082	$	54,267	$	52,601	$	53,694

~~(1) Included in these balances are~~

(1)

Accrued liabilities include the amount of RINs and LCFS Credits and federal alternative fuels tax credit ("VETC"~~) (discussed in Note 17 below) and tradable credits related to renewable identification numbers ("RIN Credits") and low carbon fuel standards ("LCFS Credits"~~) payable to third parties. VETC expired as of December 31, 2016 and is not included as of March 31, 2017. (See Note 17 for further information on VETC)

(2) Accrued liabilities as of March 31, 2017 include the accrual of transaction fees and awards of shares of the Company's common stock related to the Asset Sale (See Note 2 for further information).

Note ~~10—~~12—Debt

Debt and capital lease obligations atas of December 31, ~~2015~~2016 and ~~September 30, 2016~~March 31, 2017 consisted of the following and are further discussed below:


	December 31, 2015									December 31, 2016
	Principal Balances			Unamortized Debt Financing Costs			Balance, Net of Financing Costs			Principal Balances			Unamortized Debt Financing Costs			Balance, Net of Financing Costs
7.5% Notes(1)	$	150,000		$	399		$	149,601
SLG Notes	145,000			38			144,962
7.5% Notes (1)										$	150,000		$	274		$	149,726
5.25% Notes	250,000			3,985			246,015			110,450			1,088			109,362
PlainsCapital Bank Credit Facility										23,500			—			23,500
Canton Bonds	10,910			514			10,396			9,520			373			9,147
Capital lease obligations	6,448			—			6,448			6,028			—			6,028
NG Advantage debt										13,068			237			12,831
Other debt	10,056			328			9,728			1,782			—			1,782
Total debt and capital lease obligations	572,414			5,264			567,150			314,348			1,972			312,376
Less amounts due within one year	(150,129		)	(273		)	(149,856		)	(6,126		)	(183		)	(5,943		)
Total long-term debt and capital lease obligations	$	422,285		$	4,991		$	417,294		$	308,222		$	1,789		$	306,433


	September 30, 2016									March 31, 2017
	Principal Balances			Unamortized Debt Financing Costs			Balance Net of Financing Costs			Principal Balances			Unamortized Debt Financing Costs			Balance Net of Financing Costs
7.5% Notes(1)	$	150,000		$	304		$	149,696
7.5% Notes (1)										$	125,000		$	203		$	124,797
5.25% Notes	179,600			2,037			177,563			110,450			926			109,524
Canton Bonds	9,520			409			9,111
Capital lease obligations	5,886			—			5,886			1,181			—			1,181
NG Advantage debt										18,499			222			18,277
Other debt	10,535			171			10,364			1,604			—			1,604
Total debt and capital lease obligations	355,541			2,921			352,620			256,734			1,351			255,383
Less amounts due within one year	(5,028		)	(177		)	(4,851		)	(4,190		)	(58		)	(4,132		)
Total long-term debt and capital lease obligations	$	350,513		$	2,744		$	347,769		$	252,544		$	1,293		$	251,251

(1) ~~Included in the 7.5% Notes is~~Includes $65,000 and $40,000 in principal amount held by T. Boone Pickens ("Mr. Pickens"), as of December 31, 2016 and March 31, 2017, respectively, which is classified as “Long-term debt, related party” on the condensed consolidated balance sheet. See the description below for additional information.

7.5% Notes

On July 11, 2011, the Company entered into a loan agreement (the “CHK Agreement”) with Chesapeake NG Ventures Corporation (“Chesapeake”), an indirect wholly owned subsidiary of Chesapeake Energy Corporation, whereby Chesapeake agreed to purchase from the Company up to $150,000 of debt securities pursuant to the issuance of three convertible promissory notes over a three-year period, each having a principal amount of $50,000 (each a “CHK Note” and collectively the “CHK Notes” and, together with the CHK Agreement and other transaction documents, the “CHK Loan Documents”). The first CHK Note was issued on July 11, 2011 and the second CHK Note was issued on July 10, 2012.

On June 14, 2013 (the “Transfer Date”), ~~T. Boone~~Mr. Pickens and Green Energy Investment Holdings, LLC ("GEIH"), an affiliate of Leonard Green & Partners, L.P. (collectively, the “Buyers”), and Chesapeake entered into a note purchase agreement (“Note Purchase Agreement”) pursuant to which Chesapeake sold the outstanding CHK Notes (the “Sale”) to the Buyers. Chesapeake assigned to the Buyers all of its right, title and interest under the CHK Loan Documents (the “Assignment”), and each Buyer severally assumed all of the obligations of Chesapeake under the CHK Loan Documents arising after the Sale and the Assignment including, without limitation, the obligation to advance an additional $50,000 to the Company in June 2013 (the “Assumption”). The Company also entered into the Note Purchase Agreement for the purpose of consenting to the Sale, the Assignment and the Assumption.

Contemporaneously with the execution of the Note Purchase Agreement, the Company entered into a loan agreement with each Buyer (collectively, the “Amended Agreements”). The Amended Agreements have the same terms as the CHK Agreement, other than changes to reflect the new holders of the CHK Notes. Immediately following execution of the Amended Agreements, the Buyers delivered $50,000 to the Company in satisfaction of the funding requirement they had assumed from Chesapeake (the “2013 Advance”). In addition, the Company canceled the existing CHK Notes and issued replacement notes, and the Company also issued notes to the Buyers in exchange for the 2013 Advance (the replacement notes and the notes issued in exchange for the 2013 Advance are referred to herein as the “7.5% Notes”).

The 7.5% Notes have the same terms as the original CHK Notes, other than ~~the~~ changes to reflect their different holders. They bear interest at the rate of 7.5% per annum and are convertible at the option of the holder into shares of the Company’s common stock at a conversion price of $15.80 per share (the “7.5% Notes Conversion Price”). Upon written notice to the Company, each holder of a 7.5% Note has the right to exchange all or any portion of the principal and accrued and unpaid interest under its 7.5% Notes for shares of the Company’s common stock at the 7.5% Notes Conversion Price.

Additionally, subject to certain restrictions, the Company can force conversion of each 7.5% Note into shares of its common stock if, following the second anniversary of the issuance date of a 7.5% Note, such shares trade at a 40% premium to the 7.5% Notes Conversion Price for at least 20 trading days in any consecutive 30 trading day period.

The entire principal balance of each 7.5% Note is due and payable seven years following its issuance and the Company may repay each 7.5% Note at maturity in shares of its common stock (with a value determined by the per share volume weighted-average price for the 20 trading days prior to the maturity date) or cash. All of the shares issuable upon conversion of the 7.5% Notes have been registered for resale by their holders pursuant to a registration statement that has been filed with and declared effective by the Securities and Exchange Commission.

The Amended Agreements provide for customary events of default which, if any of them occurs, would permit or require the principal of, and accrued interest on, the 7.5% Notes to become, or to be declared, due and payable. No events of default under the 7.5% Notes had occurred as of ~~September 30, 2016.~~March 31, 2017.

On August 27, 2013, ~~Green Energy Investment Holdings, LLC~~GEIH transferred $5,000 in principal amount of its 7.5% Notes to certain third parties.

On February 9, 2017, the Company purchased from Mr. Pickens, his 7.5% Note due July 2018 having an outstanding principal amount of $25,000 held by Mr. Pickens for a cash purchase price of $21,750. The Company's repurchase of this 7.5% Note resulted in a total gain of $3,191 for the three months ended March 31, 2017.

On February 21, 2017, GEIH transferred an additional $11,800 in principal amount of its 7.5% Notes to a third party.

As a result of the foregoing transactions, as of March 31, 2017, (i) ~~T. Boone~~Mr. Pickens ~~holds~~held 7.5% Notes in the aggregate principal amount of ~~$65,000,~~$40,000, (ii) ~~Green Energy Investment Holdings, LLC holds~~GEIH held 7.5% Notes in the aggregate principal amount of ~~$80,000,~~$68,200, and (iii) other third parties ~~hold~~held 7.5% Notes in the aggregate principal amount of ~~$5,000.~~

~~SLG Notes~~

On August 24, 2011, the Company entered into convertible note purchase agreements (each, an “SLG Agreement” and collectively the “SLG Agreements”) with certain purchasers (each, a “Purchaser” and collectively, the “Purchasers”), pursuant to which the Purchasers agreed to purchase from the Company $150,000 of 7.5% convertible promissory notes due in August 2016 (each a “SLG Note” and collectively the “SLG Notes”). The transaction closed and the SLG Notes were issued on August 30, 2011.

On March 1, 2016, and pursuant to the consent of the holders of the SLG Notes, the Company prepaid in cash an aggregate of $60,000 in principal amount and $1,812 in accrued and unpaid interest owed under the SLG Notes.

On July 14, 2016, the Company entered into separate privately negotiated exchange agreements with each holder of an SLG Note to exchange the outstanding principal amount of each SLG Note, totaling $85,000 for all SLG Notes and all accrued and unpaid interest thereon, totaling $248 for all SLG Notes, for an aggregate of 14,000,000 shares of the Company's common stock and $38,155 in cash. The value of the shares of the Company's common stock issued to the holders of the SLG Notes in the exchange has been excluded from the Company's condensed consolidated statements of cash flows, as it is a non-cash financing activity. The Company recognized a loss of $891 in the three months ended September 30, 2016, related to the settlement of the SLG Notes for the Company's common stock. The repurchased and exchanged SLG Notes have been terminated and canceled in full and the Company has no further obligations under the SLG Notes.$16,800.

5.25% Notes

In September 2013, the Company completed a private offering of $250,000 in principal amount of 5.25% Convertible Senior Notes due 2018 (the “5.25% Notes”) and entered into an indenture governing the 5.25% Notes (the “Indenture”).

The net proceeds from the sale of the 5.25% Notes after the payment of certain debt issuance costs of $7,805 were $242,195. The Company has used the net proceeds from the sale of the 5.25% Notes to fund capital expenditures and for general corporate purposes. The 5.25% Notes bear interest at a rate of 5.25% per annum, payable semi-annually in arrears on October 1 and April 1 of each year, beginning on April 1, 2014. The 5.25% Notes will mature on October 1, 2018, unless purchased, redeemed or converted prior to such date in accordance with their terms and the terms of the Indenture.

Holders may convert their 5.25% Notes, at their option, at any time prior to the close of business on the business day immediately preceding the maturity date of the 5.25% Notes. Upon conversion, the Company will deliver a number of shares of its common stock, per $1 principal amount of 5.25% Notes, equal to the conversion rate then in effect (together with a cash payment in lieu of any fractional shares). The initial conversion rate for the 5.25% Notes is 64.1026 shares of the Company’s common stock per $1 principal amount of 5.25% Notes (which is equivalent to an initial conversion price of approximately $15.60 per share of the Company’s common stock). The conversion rate is subject to adjustment upon the occurrence of certain specified events as described in the Indenture. Upon the occurrence of certain corporate events prior to the maturity date of the 5.25% Notes, the Company will, in certain circumstances, in addition to delivering the number of shares of the Company’s common stock deliverable upon conversion of the 5.25% Notes based on the conversion rate then in effect (together with a cash payment in lieu of any fractional shares), pay holders that convert their 5.25% Notes a cash make-whole payment in an amount as ~~calculated~~described in ~~accordance with~~

the Indenture. The Company may, at its option, irrevocably elect to settle its obligation to pay any such make-whole payment in shares of its common stock instead of in cash.

The amount of any make-whole payment, whether it is settled in cash or in shares of the Company’s common stock upon the Company’s election, will be determined based on the date on which the corporate event occurs or becomes effective and the stock price paid (or deemed to be paid) per share of the Company’s common stock in the corporate event, as described in the Indenture.

The Company may not redeem the 5.25% Notes prior to October 5, 2016. On or after October 5, 2016, the Company may, at its option, redeem for cash all or any portion of the 5.25% Notes if the closing sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which notice of redemption is provided, exceeds 160% of the conversion price on each applicable trading day. In the event of the Company’s redemption of the 5.25% Notes, the redemption price will equal 100% of the principal amount of the 5.25% Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for in the 5.25% Notes.

If the Company undergoes a fundamental change (as defined in the Indenture) prior to the maturity date of the 5.25% Notes, subject to certain conditions as described in the Indenture, holders may require the Company to purchase, for cash, all or any portion of their 5.25% Notes at a repurchase price equal to 100% of the principal amount of the 5.25% Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change purchase date.

The Indenture contains customary events of default with customary cure periods, including, without limitation, failure to make required payments or deliveries of shares of the Company’s common stock when due under the Indenture, failure to comply with certain covenants under the Indenture, failure to pay when due or acceleration of certain other indebtedness of the Company or certain of its subsidiaries, and certain events of bankruptcy and insolvency of the Company or certain of its subsidiaries. The occurrence of an event of default under the Indenture will allow either the trustee or the holders of at least 25% in principal amount of the then-outstanding 5.25% Notes to accelerate, or upon an event of default arising from certain events of bankruptcy or insolvency of the Company, will automatically cause the acceleration of, all amounts due under the 5.25% Notes. No events of default under the 5.25% Notes had occurred as of ~~September 30, 2016.~~March 31, 2017.

The 5.25% Notes are senior unsecured obligations of the Company and rank senior in right of payment to the Company’s future indebtedness that is expressly subordinated in right of payment to the 5.25% Notes; equal in right of payment to the Company’s unsecured indebtedness that is not so subordinated; effectively junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness (including trade payables) of the Company’s subsidiaries.

~~The Company's board of directors has authorized and approved~~During the ~~use of up to $50,000 to purchase outstanding 5.25% Notes in the open market, in accordance with the terms of the Indenture. Pursuant to this approval, during the three and nine months~~year ended ~~September 30,~~December 31, 2016, ~~respectively,~~ the Company paid an aggregate of ~~$1,180 and $24,883, respectively,~~$84,344 in cash to repurchase and retire ~~$1,400 and $45,400, respectively,~~$114,550 in aggregate principal amount of the 5.25% Notes, together with ~~$28 and $766, respectively,~~$1,546 in accrued and unpaid interest thereon. Additionally, pursuant to a privately negotiated exchange agreement with certain holders of the 5.25% Notes, on May 4, 2016, the Company issued 6,265,829 shares of its common stock in exchange for an aggregate principal amount of $25,000 of 5.25% Notes held by such holders ~~together with~~and accrued and unpaid interest thereon. The value of the shares of the Company's common stock issued to the holders of the 5.25% Notes in the exchange has been excluded from the Company's condensed consolidated statements of cash flows as it is a non-cash financing activity. The Company's repurchase and exchange of 5.25% Notes for the ~~three and nine months~~year ended ~~September 30,~~December 31, 2016 resulted in a total gain of ~~$223 and $26,266 for such periods, respectively.~~$35,239 recorded during the period. All repurchased and exchanged 5.25% Notes have been surrendered to the trustee for such notes and ~~canceled.~~canceled in full and the Company has no further obligations under such notes.

PlainsCapital Bank Credit Facility

On February 29, 2016, the Company entered into a Loan and Security Agreement (“LSA”) with PlainsCapital Bank (“Plains”), pursuant to which Plains agreed to lend the Company up to $50,000 on a revolving basis from time to time for a term of one year (the “Credit Facility”). All amounts advanced under the Credit Facility ~~are~~were due and payable on February 28, 2017. Simultaneously, the Company drew ~~down~~ $50,000 under this Credit Facility, which the Company repaid in full on August 31, 2016. On October 31, 2016 the LSA was amended solely to extend the Credit Facility's maturity date from February 28, 2017 to September 30, 2018. On December 22, 2016, the Company drew $23,500 under the Credit Facility, which the Company repaid in full on March 31, 2017. As a result, the Company has no amounts outstanding under the Credit Facility as of March 31, 2017.

The Credit Facility is evidenced by a promissory note the Company issued on February 29, 2016 in favor of Plains (the “Plains Note”). Interest on the Plains Note is payable monthly and accrues at a rate equal to the greater of (i) the then-current LIBOR rate plus 2.30% or (ii) 2.70%. As collateral security for the prompt payment in full when due of the Company's obligations to Plains under the LSA and the Plains Note, the Company pledged to and granted Plains a security interest in all of its right, title

and interest in the cash and corporate and municipal bonds rated AAA, AA or A by Standard & Poor’s Rating Services that the Company holds in an account at Plains. In connection with such pledge and security interest granted under the Credit Facility, on February 29, 2016, the Company entered into a Pledged Account Agreement with Plains and PlainsCapital Bank - Wealth Management and Trust (the “Pledge Agreement” and collectively with the LSA and the Plains Note, the “Plains Loan Documents”).The Plains Loan Documents include certain covenants of the Company and also provide for customary events of default, which, if any of them occurs, would permit or require, among other things, the principal of, and accrued interest on, the Credit Facility to become, or to be declared, due and payable. Events of default under the Plains Loan Documents include, among others, the occurrence of certain bankruptcy events, the failure to make payments when due under the Plains Note and the transfer

or disposal of the collateral under the LSA. No ~~amounts were outstanding under the Credit Facility as of September 30, 2016 and no~~ events of default under the Plains Loan Documents had occurred as of ~~September 30, 2016.~~

~~On October~~March 31, ~~2016 the LSA was amended solely to extend the Credit Facility's maturity date from February 28, 2017 to September 30, 2018.~~2017.

Canton Bonds

On March 19, 2014, Canton Renewables, LLC (“Canton”), a ~~wholly owned~~former subsidiary of the Company, completed the issuance of Solid Waste Facility Limited Obligation Revenue Bonds (Canton Renewables, LLC — Sauk Trail Hills Project) Series 2014 in the aggregate principal amount of $12,400 (the “Canton Bonds”).

The Canton Bonds were issued by the Michigan Strategic Fund (the “Issuer”) and the proceeds of such issuance were loaned by the Issuer to Canton pursuant to a loan agreement that became effective on March 19, ~~2014 (the “Loan Agreement”)~~2014.

On March 31, 2017, Canton was sold to BP in the Asset Sale (see Note 2). The Canton Bonds are expected to be repaid from revenue generated by Canton from the sale of RNG and are secured by the revenue and assets of Canton. The Canton Bond repayments will be amortized through July 1, 2022, the average coupon interest rate onAs a result, the Canton Bonds became the obligation of BP as of such date.

NG Advantage Debt

On May 12, 2016 and January 24, 2017, respectively, NG Advantage entered into a loan and security agreement (“LSA”) with Commerce Bank & Trust Company (“Commerce”), pursuant to which Commerce agreed to lend NG Advantage $6,300 and $6,150, respectively. The proceeds were primarily used to fund the purchases of CNG trailers and equipment. Interest and principal for both loans are payable monthly in eighty-four equal monthly installments at an annual rate of 4.41% and 5.0%, respectively. As collateral security for the prompt payment in full when due of the NG Advantage's obligations to Commerce under the LSA, NG Advantage pledged to and granted Commerce a security interest in all of its right, title and interest in the CNG trailers and equipment.

On November 30, 2016, NG Advantage entered into a LSA with Wintrust Commercial Finance (“Wintrust”), pursuant to which Wintrust agreed to lend NG Advantage $4,695. The proceeds were primarily used to fund the purchases of CNG trailers and equipment. Interest and principal is ~~6.6%~~payable monthly in seventy-two equal monthly installments at an annual rate of 5.17%. As collateral security for the prompt payment in full when due of the NG Advantage's obligations to Wintrust under the LSA and the Plains Note, NG Advantage pledged to and granted Wintrust a security interest in all of its right, title and interest in the CNG trailers and equipment.

NG Advantage has other debt for trailers and equipment due at various dates through 2021 bearing interest at rates up to 6.01%, with weighted average interest rates of 5.51% and 5.46%, and ~~all but $1,000~~outstanding principal balance of ~~the principal amount of the Canton Bonds is non-recourse to Canton’s parent companies, including the Company.~~

~~Canton used the Canton Bond proceeds primarily to (i) refinance the cost of constructing~~$2,598 and equipping its RNG extraction and production project in Canton, Michigan and (ii) pay a portion of the costs associated with the issuance of the Canton Bonds. The refinancing described in the prior sentence was accomplished through distributions to Canton's direct and indirect parent companies who provided the financing for the RNG production facility, and such companies have used such distributions to finance construction of additional RNG extraction and processing projects and for working capital purposes.

The Loan Agreement contains customary events of default, with customary cure periods, including, without limitation, failure to make required payments when due under the Loan Agreement, failure to comply with certain covenants under the Loan Agreement, certain events of bankruptcy and insolvency of Canton, and the existence of an event of default under the indenture governing the Canton Bonds that was entered into between the Issuer and The Bank of New York Mellon Trust Company, N.A., as trustee.

The occurrence of an event of default under the Loan Agreement will allow the Issuer or the trustee to, among other things, accelerate all amounts due under the Loan Agreement. No events of default under the Loan Agreement had occurred$2,418 as of ~~September 30, 2016.~~December 31, 2016 and March 31, 2017, respectively.

Other Debt

The Company has other debt due at various dates through 2023 bearing interest at rates up to ~~22.34% and~~5.02% with a weighted average interest ~~rate~~rates of ~~6.35%~~5.72% and ~~5.11%~~4.66% as of December 31, ~~2015~~2016 and ~~September 30, 2016,~~March 31, 2017, respectively.

Note ~~11—~~13—Net Income ~~(Loss)~~ Per Share

Basic net income ~~(loss)~~ per share is computed by dividing the net income ~~(loss)~~ attributable to Clean Energy Fuels Corp. by the weighted-average number of common shares outstanding and common shares issuable for little or no cash consideration during ~~each~~the period. Diluted net income ~~(loss)~~ per share is computed by dividing the net income ~~(loss)~~ attributable to Clean Energy Fuels Corp. by the weighted-average number of common shares outstanding and common shares issuable for little or no cash consideration during the period and potentially dilutive securities outstanding during the ~~period.~~

~~Potentially~~period, and therefore reflects the dilution from common shares that may be issued upon exercise or conversion of these potentially dilutive securities, ~~include~~such as stock options, warrants, convertible notes and restricted stock units. The dilutive effect of stock ~~options~~awards and warrants is computed under the treasury stock method. The dilutive effect of convertible notes and restricted stock units is computed under the if-converted method. Potentially dilutive securities are excluded from the computations of diluted net income ~~(loss)~~ per share if their effect would be antidilutive.

The information required to compute basic and diluted net income per share is as follows:



	Three Months Ended March 31,
	2016	2017
Weighted-average common shares outstanding	97,178,768	148,847,503
Dilutive effect of potential common shares from restricted stock units	2,643,076	4,124,650
Weighted-average common shares outstanding - diluted	99,821,844	152,972,153

The following potentially dilutive securities have been excluded from the diluted net income per share calculations because their effect would have been antidilutive. Although such securities were antidilutive for the respective periods, they could be dilutive in the future.



	Three Months Ended March 31,
	2016	2017
Stock Options	11,740,308	12,426,603
Warrants	3,130,682	—
Convertible Notes	29,102,645	14,991,521
Total	43,973,635	27,418,124

At-The-Market Offering Program On November 11, 2015, the Company entered into an equity distribution agreement with Citigroup Global Markets Inc. (“Citigroup”), as sales agent and/or principal, pursuant to which the Company may issue and sell, from time to time, through or to Citigroup shares of ~~its~~the Company's common stock having an aggregate offering price of up to $75,000 in an “at-the-market” offering program (the “ATM Program”).

On September 9, 2016, the Company entered into an amended and restated equity distribution agreement with Citigroup, which amends, restates, and replaces the original equity distribution agreement in its entirety, for the primary purpose of increasing from $75,000 to $110,000 the aggregate offering price of shares of common stock available for issuance and sale ~~thereunder~~ in the ATM Program. On December 21, 2016, the Company entered into a second amended and restated equity distribution agreement with Citigroup, for the primary purpose of increasing from $110,000 to $200,000 the aggregate offering price of shares of common stock available for issuance and sale in the ATM program.

The following table summarizes the activity under the ATM Program for the ~~following periods:~~periods presented:

Through December 31, Three Months Ended
September 30, Nine Months Ended
September 30,
(in 000s, except per-share amounts) 2015 2016 2016
Gross proceeds $ 6,943
$ 16,066
$ 69,113

Fees and issuance costs $ 493
386
1,728

Net proceeds $ 6,450
$ 15,680
$ 67,385

Shares issued 1,561,902
3,824,144
21,325,587

~~GE Warrant~~On December 31, 2015, the Company terminated its credit agreement (the "Credit Agreement") with General Electric Capital Corporation ("GE") and all related documents, except for a warrant to purchase up to 1,000,000 shares of the Company's common stock (the "GE Warrant"), which remained outstanding as of September 30, 2016. The shares of the Company's common stock subject to the GE Warrant are included in the basic and diluted net income (loss) per share calculations, as they are issuable upon exercise of the GE Warrant.

On October 4, 2016, the holders of the GE Warrant exercised such warrant in full pursuant to the cashless exercise provisions thereof, which resulted in the Company's issuance to such holders of 997,740 shares of common stock.

~~The information required to compute basic and diluted net income (loss) per share is as follows:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Weighted-average common shares outstanding 91,561,613
130,436,038
91,454,117
112,819,041

The following potentially dilutive securities have been excluded from the diluted net income (loss) per share calculations because their effect would have been antidilutive. Although such securities were antidilutive for the respective periods, they could be dilutive in the future.

Nine Months Ended
September 30,
2015 2016
Options 10,707,060
11,582,091
Warrants 6,130,682
—
Convertible Notes 35,185,979
21,006,491
Restricted Stock Units 2,942,126
2,432,930



	Three Months Ended March 31,		Three Months Ended March 31,
(in 000s, except per-share amounts)	2016		2017
Gross proceeds	$	22,051	$	10,767
Fees and issuance costs	681		254
Net proceeds	21,370		10,513
Shares issued	7,664,467		3,802,500

Note ~~12—~~14—Stock-Based Compensation

The following table summarizes the compensation expense and related income tax benefit related to the Company's stock-based compensation arrangements recognized in the condensed consolidated statements of operations during the periods:

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2016 2015 2016
Stock-based compensation expense, net of $0 tax in 2015 and 2016 $ 2,656
$ 2,077
$ 8,009
$ 6,533



	Three Months Ended March 31,
	2016		2017
Stock-based compensation expense, net of $0 tax in 2016 and 2017	$	2,419	$	1,910

At ~~September 30, 2016,~~March 31, 2017, there was ~~$9,487~~$11,330 of total unrecognized compensation costs related to non-vested shares subject to outstanding stock options and restricted stock units, which is expected to be expensed over a weighted-average period of approximately ~~1.80~~2.05 years.

Note ~~13—Environmental Matters, Litigation, Claims,~~ 15—Income Taxes

The Company’s income tax benefit (expense) for the three months ended March 31, 2016 and 2017 was $(381) and $2,263, respectively. Tax benefit (expense) for all periods was comprised of taxes due on the Company’s U.S. and foreign operations. The increase in the Company’s income tax benefit for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016 was primarily due to a deferred tax benefit attributed to the reduction of goodwill that arose from the Asset Sale (see Note 2). The effective tax rates for the three months ended March 31, 2016 and 2017 are different from the federal statutory tax rate primarily as a result of losses for which no tax benefit has been recognized.

During the three months ended March 31, 2017, the Company also benefited from the utilization of federal and state net operating loss ("NOL") carryovers that offset all of the Company's federal and the majority of its state taxes. In addition to the decrease in its deferred tax liability of $2,493 attributed to the reduction in goodwill, the utilization of NOLs also resulted in a decrease in the Company's deferred tax assets attributed to NOLs by $29,768 and a corresponding decrease in the Company deferred tax asset valuation allowance.

The Company did not record a change in its liability for unrecognized tax benefits or penalties in the three months ended March 31, 2016 or 2017. The net interest incurred was immaterial for both the three months ended March 31, 2016 and 2017, respectively.

Note 16—Commitments and Contingencies

Environmental Matters

The Company is subject to federal, state, local and foreign environmental laws and regulations. The Company does not anticipate ~~making~~ any expenditures to comply with such laws and regulations that would have a material impact on the ~~Company’s~~Company's consolidated financial position, results of operations or liquidity. The Company believes that its operations comply, in all material respects, with applicable federal, state, local and foreign environmental laws and regulations.

Litigation, Claims and Contingencies

The Company may become party to various legal actions that arise in the ordinary course of its business. ~~During the course of its operations, the~~The Company is also subject to audit by tax authorities for varying periods in various federal, state, local and foreign tax ~~jurisdictions. Disputes~~jurisdictions, and disputes may arise during the course of ~~such audits as to facts and matters of law.~~these audits. It is impossible to determine the ultimate liabilities that the Company may incur resulting from any ~~such~~of these lawsuits, claims and proceedings, audits, commitments, contingencies and related matters or the timing of these liabilities, if any. If these matters were to ultimately be resolved unfavorably, an outcome not currently anticipated, it is possible that such an outcome could have a material adverse effect upon the Company’s consolidated financial position, results of operations, or liquidity. ~~However, the~~The Company, however, does not anticipate such an outcome and believes that the ultimate resolution of ~~such~~these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity.

Note ~~14—Income Taxes~~17—Alternative Fuels Excise Tax Credit

In December 2015, Congress passed the Consolidated Appropriations Act that included an alternative fuel tax credit which we refer to as "VETC." The ~~Company’s~~credit was made retroactive to January 1, 2015 and extended through December 31, 2016, except that the alternative fuels fuel tax credit for LNG sold as a vehicle fuel in 2016 was changed to be based on the diesel gallon equivalent of LNG sold rather than the liquid gallon of LNG sold. As a result, the Company was eligible to receive a credit of $0.50 per gasoline gallon equivalent of CNG sold as a vehicle fuel in 2016 and $0.50 per diesel gallon equivalent of LNG sold in 2016.

Based on the service relationship with its customers, either the Company or its customers claimed the credit. The Company records its VETC credits, if any, as revenue in its condensed consolidated statements of operations because the credits are fully payable and do not need to offset income tax ~~benefit (expense)~~liabilities to be received. As such, the credits are not deemed income tax credits under the accounting guidance applicable to income taxes.

VETC revenue for the three months ended ~~September 30, 2015 and~~March 31, 2016 was $241 and $(416), respectively. The Company's income tax (expense) for the nine months ended September 30, 2015 and 2016 was $(1,353) and $(1,229), respectively. Tax benefit (expense) for all periods was comprised of taxes due on the Company’s U.S. and foreign operations. The increase in the Company’s income tax provision for the three months ended September 30, 2016 as compared to the income tax provision for the three months ended September 30, 2015 was primarily attributable to an increase in the earnings of foreign subsidiaries. The decrease in the Company’s income tax provision for the nine months ended September 30, 2016 as compared to the income tax provision for the nine months ended September 30, 2015 was primarily attributable to a decrease in the earnings of foreign subsidiaries. The effective tax rates for the three and nine months ended September 30, 2015 and 2016 are different from the federal statutory tax rate primarily as a result of losses for which no tax benefit has been recognized.

The Company did not record a change in its liability for unrecognized tax benefits or penalties in the three and nine months ended September 30, 2015. The net interest incurred was immaterial for both the three and nine months ended September 30, 2015 and 2016, respectively.

The Company increased its reserve for unrecognized tax positions by $17.6 million during the three months ended September 30, 2016. As unrecognized tax positions are not recognized for financial reporting purposes, this position does not have an impact on the balance sheet, statement of operations or statement of cash flows. If this position were$6,381. VETC ceased to be sustained, then there would be an increase in the Company's deferred tax assets attributed to its federal and state net operating loss carryforwards, as well as an increase to the amount of the Company's deferred tax asset valuation allowance. The increase was attributable to the write-off of unamortized debt issuance costs resulting from the Company's termination of its Credit Agreement with GEavailable after it expired on December ~~15, 2015. Although the ultimate outcome of this tax position is uncertain, the Company believes that this non-cash charge can~~31, 2016 and may not be ~~deducted in determining its U.S. taxable income~~available for ~~2015.~~

any subsequent period.

Note ~~15—Fair Value Measurements~~

~~The Company follows the authoritative guidance for fair value measurements with respect to assets~~18—Recently Issued and liabilities that are measured at fair value on a recurring basis and non-recurring basis. Under the standard, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as of the measurement date. The standard also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy consists of the following three levels: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly; Level 3 inputs are unobservable inputs for

~~the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.~~

At September 30, 2016, the Company’s financial instruments consisted of available-for-sale securities, liability-classified warrants, and debt instruments. The Company’s available-for-sale securities are classified within Level 2 because they are valued using the most recent quoted prices for identical assets in markets that are not active and quoted prices for similar assets in active markets. The liability-classified warrants are classified within Level 3 because the Company uses the Black-Scholes option pricing model to estimate the fair value based on inputs that are not observable in any market. The fair value of the Company's debt instruments approximated their carrying values at December 31, 2015 and September 30, 2016. See Note 10 for further information about the Company's debt instruments.

~~The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis at December 31, 2015 and September 30, 2016, respectively:~~

Description Balance at
December 31, 2015 Level 1 Level 2 Level 3
Assets:
Available-for-sale securities(1):
Certificate of deposits $ 48,551
$ —
$ 48,551
$ —
Municipal bonds and notes 16,790
—
16,790
—
Zero coupon bonds 499
—
499
—
Corporate bonds 37,104
—
37,104
—
Liabilities:
Warrants(2) 632
—
—
632

Description Balance at
September 30, 2016 Level 1 Level 2 Level 3
Assets:
Available-for-sale securities(1):
Certificate of deposits $ 46,700
$ —
$ 46,700
$ —
Municipal bonds and notes 14,462
—
14,462
—
Zero coupon bonds 429
—
429
—
Corporate bonds 15,722
—
15,722
—
Liabilities:
Warrants(2) 579
—
—
579

~~(1) Included in short-term investments in the condensed consolidated balance sheets. See Note 5 for further information.~~

~~(2) Included in accrued liabilities and other long-term liabilities in the condensed consolidated balance sheets.~~

~~Non-Financial Assets~~

No impairments of long-lived assets measured at fair value on a non-recurring basis have been incurred during the nine months ended September 30, 2015 and 2016. The Company’s use of these non-financial assets does not differ from their highest and best use as determined from the perspective of a market participant.

~~Note 16—Recently Issued~~Adopted Accounting Standards

~~The~~In January 2017, the Financial Accounting Standards Board ~~("FASB"~~(“FASB”) ~~has~~ issued ~~three amendments~~Accounting Standards Update (“ASU”) 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the ~~new revenue standard,~~September 22, 2016 and November 17, 2016 EITF Meetings. This ASU ~~No.~~requires registrants to disclose the effect that ASU 2014-09 (Revenue from Contracts with Customers (Topic ~~606)~~606), ~~as follows:~~ASU 2016-02 (

Leases (Topic 842), and ASU 2016-13 (Financial Instruments--Credit Losses (Topic 326) will have on their financial statements when adopted in a future period. In ~~May 2016, the FASB issued ASU No. 2016-12,~~ ~~Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients.~~ ~~This update clarifies the objectives of collectability, sales and other taxes, non-cash consideration, contract modifications at transition, completed contracts at transition and technical correction.~~

~~In April 2016, the FASB issued ASU No. 2016-10,~~ ~~Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing.~~ ~~This update clarifies how an entity identifies performance obligations related to customer contracts and helps to improve the operability and understanding of the licensing implementation guidance.~~

~~In August 2015, the FASB issued ASU No. 2015-14,~~ ~~Revenue from Contracts with Customers, Deferral of the Effective Date~~, which defers the new revenue guidance to be effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period, which for the Company is the first quarter of 2018, using one of two prescribed retrospective methods. The Company is evaluatingcases where a registrant cannot reasonably estimate the impact of the adoption, additional qualitative disclosures should be considered to assist the reader in assessing the significance of the standard’s impact on its financial statements. This guidance was effective upon issuance and other than enhancements to the qualitative disclosures regarding the future adoption of the referenced ASUs above, adoption of this ASU ~~will~~is not expected to have any impact on ~~its~~the Company’s condensed consolidated financial ~~statements and related disclosures as well as which transition method it will adopt.~~statements.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. Under the new ~~pronouncement,~~standard, the selling (transferring) entity is required to recognize a current tax expense or benefit upon transfer of the asset. Similarly, the purchasing (receiving) entity is required to recognize a deferred tax asset or liability, as well as the related deferred tax benefit or expense, upon purchase or receipt of the asset. ~~This pronouncement is effective for reporting periods beginning after December 15, 2017, with early adoption permitted.~~ The Company ~~is evaluating~~early adopted the ~~impact this ASU will have on its consolidated financial statements and related disclosures.~~

~~In September 2016,~~standard as of January 1, 2017. This election was implemented under the ~~FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payments. The ASU provides clarification as to~~modified retrospective approach, resulting in a $302 increase in accumulated deficit representing the classification of certain transactions as operating, investing or financing activities. This pronouncement is effective for reporting periods beginning after December 15, 2017, which for the Company is the first quarter of 2018. The Company is evaluating the impact this ASU will have on its consolidated financial statements and related disclosures.

~~In June 2016, the FASB issued ASU No. 2016-13,~~ ~~Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU amends the impairment model to utilize an expected loss methodology in place~~cumulative recognition of the ~~currently used incurred loss methodology, which will result in~~income tax consequences of intra-entity transfers of assets other than inventory that occurred before the more timely recognition of losses. This pronouncement is effective for reporting periods beginning after December 15, 2019, which for the Company is the first quarter of 2020. The Company is evaluating the impact this ASU will have on its consolidated financial statements and related disclosures.adoption date.

In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payments Accounting. The ~~pronouncement~~new standard was issued to simplify the accounting for share-based payment transactions, including income tax consequences, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. ~~This pronouncement is effective for reporting periods beginning after December 15, 2016. Early adoption is allowed in an interim or annual reporting period.~~ The Company adopted the standard as of January 1, 2017 and in connection with the adoption, the Company elected to recognize forfeitures when they occur. Previously, the Company estimated a forfeiture rate in accordance with prior guidance. This election was implemented under the modified retrospective approach with a cumulative effect of an increase in accumulated deficit of $194, net of tax. This adjustment represents the cumulative additional compensation expense that would have been amortized through the date of adoption had this accounting policy election been in place. This ASU also eliminates the requirement to defer recognition of an excess tax benefit until the benefit is ~~evaluating~~realized through a reduction to taxes payable. As a result, the Company’s deferred tax asset relating to its net operating loss carryovers increased by $8,600 with a corresponding increase in the deferred tax asset valuation allowance. The Company will also adopt on a prospective basis (1) the classification of excess tax benefits as an operating activity in the condensed consolidated statements of cash flows and (2) the exclusion of the amount of excess tax benefits when applying the treasury stock method for the Company’s diluted earnings per share calculation. Neither of these adoptions had a material impact ~~this ASU will have~~ on ~~its~~the Company's cash flows or diluted earnings per share calculation for the period ended March 31, 2017. Additionally, the Company continues to (1) classify cash paid by the Company for directly withholding shares for tax withholding purposes as a financing activity in the condensed consolidated ~~financial~~ statements of cash flows and ~~related disclosures.~~(2) withhold the statutory minimum taxes for participants in the Company’s stock-based compensation plans.

In ~~February 2016,~~May 2014, the FASB issued ASU ~~No. 2016-02,~~ ~~Leases~~.2014-09 related to revenue from contracts with customers, which, along with amendments issued in 2015 and 2016, will provide a single, comprehensive revenue recognition model for all contracts with customers. The underlying principle is to recognize revenue when promised goods or services are transferred to customers in amounts that reflect the consideration that is expected to be received for those goods or services. The new standard also requires entities to enhance disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This ASU, as amended, will ~~require most leases to~~ be ~~recognized on the balance sheet which will increase reported assets and liabilities. Lessor accounting remains substantially similar to current guidance. The new standard is~~ effective for annual ~~and interim~~reporting periods in fiscal years beginning after December 15, 2018, which for the Company is the first quarter of 2019, and mandates a modified retrospective transition method. The Company is evaluating the impact this ASU will have on its consolidated financial statements and related disclosures.

~~In January 2016, the FASB issued ASU No. 2016-01,~~ ~~Recognition and Measurement of Financial Assets and Financial Liabilities~~. The new standard requires equity investments to be measured at fair value with changes in fair value recognized in net income, simplifies the impairment assessment of equity investments without readily determinable fair values, eliminates the requirement to disclose the methods and significant assumptions used to estimate fair value, requires use of the exit price notion when measuring fair value, requires separate presentation in certain financial statements, and requires an evaluation of the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. The new standard is effective for fiscal years beginning after December 15, 2017, which for the Company is the first quarter of fiscal 2018. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized in retained earnings as of the date of adoption ("modified retrospective basis"). The Company expects to adopt this ASU on a modified retrospective basis and is currently evaluating the impact of this ASU ~~will have~~ on its consolidated financial statements and related disclosures.

~~Note 17—Alternative Fuels Excise Tax Credit~~

Under separate pieces of U.S. federal appropriations legislation from October 1, 2006 through December 31, 2014, the Company was eligible to receive a federal alternative fuels tax credit (“VETC”) of $0.50 per gasoline gallon equivalent of CNG and $0.50 per liquid gallon of LNG that we sold as vehicle fuel. In December 2015, Congress passed the Consolidated Appropriations Act that included the passage of an alternative fuel tax credit which we continue to refer to as VETC. The credit was made retroactive to January 1, 2015 and extended through December 31, 2016, except that the alternative fuel tax credit for LNG sold as a vehicle fuel in 2016 was changed to be based on the diesel gallon equivalent of LNG sold rather than the liquid gallon of LNG sold.

As a result, the Company was eligible to receive a credit of $0.50 per gasoline gallon equivalent of CNG sold as a vehicle fuel in 2015 and 2016, $0.50 per liquid gallon of LNG sold in 2015 and $0.50 per diesel gallon equivalent of LNG sold in 2016.

Based on the service relationship with its customers, either the Company or its customers claim the credit. The Company records its VETC credits as revenue in its condensed consolidated statements of operations, as the credits are fully payable and do not need to offset income tax liabilities to be received.

~~VETC revenues for 2015, totaling $30,986, were all recognized in December 2015. VETC revenues for the three and nine months ended September 30, 2016 were $6,693 and $19,609, respectively.~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) should be read together with the unaudited condensed consolidated financial statements and the related notes included in this report. For additional context with which to understand our financial condition and results of operations, refer to the MD&A for the fiscal year ended December 31, ~~2015~~2016 included in our Annual Report on Form 10-K for our fiscal year ended December 31, ~~2015,~~2016, which was filed with the Securities and Exchange Commission (“SEC”) on March ~~3, 2016,~~7, 2017, as well as the audited consolidated financial statements and notes included therein (collectively, our ~~“2015~~“2016 10-K”). Unless the context indicates otherwise, all

references to “Clean Energy,” the “Company,” “we,” “us,” or “our” in this MD&A and elsewhere in this report refer to Clean Energy Fuels Corp. together with its majority and wholly owned subsidiaries.

Cautionary Statement Regarding Forward Looking Statements

This ~~MD&A~~Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) and other sections of this report contain forward-looking statements ~~as defined by~~within the ~~“safe harbor” provisions~~meaning of Section 27A of the ~~Private~~ Securities ~~Litigation Reform~~ Act of ~~1995.~~1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements relate to future events or circumstances or our future financial performance and are based upon our current assumptions, expectations and beliefs concerning future developments and their potential effect on our business. In some cases, you can identify ~~these~~forward-looking statements by ~~forward-looking words such as~~the following words: “if,~~” “shall,~~” “may,” “might,” ~~“could,~~“shall,” “will,” ~~“should,~~“can,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “goal,” “objective,” “initiative,” “anticipate,” “believe,” “estimate,” “predict,” “project,” ~~“intend,~~“forecast,” ~~“goal,~~“potential,” ~~“objective,~~“continue,” ~~“predict,” “potential” or “continue,”~~“ongoing” or the negative of these terms or other comparable terminology, although the absence of these words does not mean that a statement is not forward-looking. ~~These forward-looking~~We believe the statements ~~which are based on various assumptions and expectations that~~ we ~~believe are reasonable, may include statements~~make in this MD&A about ~~among other things,~~ our future financial and operating performance, our growth strategies and anticipated trends in our industry and our ~~business. These~~business are forward-looking by their nature. Although the forward-looking statements in this MD&A reflect our good faith judgment, based on currently available information, they are only predictions and involve known and unknown risks, uncertainties and other factors that ~~could~~may cause our or our industry's actual results, levels of activity, performance or achievements to ~~differ~~be materially different from ~~the historical or~~any future results, levels of activity, performance or achievements expressed or implied by ~~such~~these forward-looking statements. ~~These factors~~Factors that might cause or contribute to such differences include, among others, those discussed under “Risk Factors” in this report and in our ~~2015~~2016 Form 10-K. WeAs a result of these and other potential risk factors, the forward-looking statements in this MD&A may not prove to be accurate. All forward-looking statements in this MD&A are made only as of the date of this document and, except as required by law, we undertake no ~~duty~~obligation to update publicly any ~~of these~~ forward-looking statements ~~after the date we file this report~~for any reason, including to conform ~~such forward-looking~~these statements to actual results or ~~revised expectations, except as otherwise required by law.~~

~~In preparing this MD&A, we presume that readers have access~~ to ~~and have read the MD&A~~changes in our ~~2015 10-K pursuant to Instruction 2 to paragraph (b) of Item 303 of Regulation S-K promulgated by the SEC.~~expectations.

Overview

We are the leading provider of natural gas as an alternative fuel for vehicle fleets in the United States and Canada, based on the number of stations operated and the amount of gasoline gallon equivalents ("GGEs") of compressed natural gas ("CNG"), liquefied natural gas ("LNG") and renewable natural gas ("RNG") delivered. Our principal business is supplying CNG, LNG and RNG ~~(RNG~~(which can be delivered in the form of CNG or LNG) for light, medium and heavy-duty vehicles and providing operation and maintenance ("O&M") services for ~~natural gas fueling~~vehicle fleet customer stations. As a comprehensive solution provider, we ~~also:~~also design, build, operate and maintain fueling stations; manufacture, sell and service non-lubricated natural gas fueling compressors and ~~related~~other equipment used in CNG stations and LNG stations; offer assessment, design and modification solutions to provide operators with code-compliant service and maintenance facilities for natural gas vehicle fleets; transport and sell CNG and LNG to industrial and institutional energy users who do not have direct access to natural gas pipelines; ~~process~~procure and sell RNG; sell tradable credits we generate by selling natural gas and RNG as a vehicle fuel, including credits under the California and Oregon Low Carbon Fuel Standards (collectively, "LCFS Credits") and Renewable Identification Numbers ("RIN Credits" or "RINs") under the federal Renewable Fuel Standard Phase 2; help our customers acquire and finance natural gas vehicles; and obtain federal, state and local tax credits, grants and incentives.

We serve fleet vehicle operators in a variety of markets, including heavy-duty trucking, airports, refuse, public transit, government fleets, and industrial and institutional energy users. We believe these fleet markets will continue to present a growth opportunity for natural gas vehicle ~~fuels~~fuel for the foreseeable future. As of ~~September 30, 2016,~~March 31, 2017, we serve nearly 1,000 fleet customers operating over ~~44,000~~46,000 natural gas vehicles, and we own, operate or supply over 575 natural gas fueling stations in 42 states in the United States and four provinces in ~~British Columbia and Ontario,~~ Canada.

Performance Overview

The following performance overview discusses matters on which our management focuses in evaluating our financial condition and operating performance and results.

Sources of Revenue

The following table ~~presents~~represents our sources of ~~revenue during the periods presented:~~revenue:


Revenue (in millions)	Three Months Ended September 30, 2015		Three Months Ended September 30, 2016		Nine Months Ended September 30, 2015		Nine Months Ended September 30, 2016		Three Months Ended March 31, 2016		Three Months Ended March 31, 2017
Volume Related(1)	$	67.9	$	71.3	$	195.8	$	210.8	$	67.8	$	73.6
Compressor Sales	12.9		5.3		41.4		22.4		8.3		6.5
Station Construction Sales	11.5		13.7		27.5		48.0		13.3		9.3
VETC(2)	—		6.7		—		19.6		6.4		—
Other	—		—		0.3		—		—		0.1
Total	$	92.3	$	97.0	$	265.0	$	300.8	$	95.8	$	89.5


(1)	Our volume-related revenue primarily consists of CNG, LNG and RNG fuel sales, RINs and LCFS Credits sales and O&M services.


(2)	Represents a federal alternative fuels tax credit that we refer to as "VETC" which expired December 31, 2016.

Key Operating Data

In evaluating our operating performance, our management focuses primarily on: (1) the amount of CNG, LNG and RNG gasoline gallon equivalents delivered (which we define as (i) the volume of gasoline gallon equivalents we sell to our customers, plus (ii) the volume of gasoline gallon equivalents dispensed at facilities we do not own but where we provide O&M services on a per-gallon or fixed fee basis, plus (iii) our proportionate share of the gasoline gallon equivalents sold as CNG by our joint venture with Mansfield Ventures, LLC called Mansfield Clean Energy Partners, LLC (“MCEP”), plus (iv) our proportionate share ~~of the gasoline gallon equivalents sold as CNG by our joint venture in Peru (through March 2013 when we sold our interest in the joint venture in Peru), plus (v) our proportionate share~~ (as applicable) of the gasoline gallon equivalents of RNG produced and sold as pipeline quality natural gas by the RNG production facilities we ~~own~~owned or ~~operate)~~operated), (2) our station construction cost of sales, (3) our gross margin (which we define as revenue minus cost of sales), and ~~(3)~~(4) net income (loss) attributable to us. The following tables, which should be read in conjunction with ~~our~~the condensed consolidated financial statements and notes included in this report and ~~our~~the consolidated financial statements and notes included in our ~~2015~~2016 Form 10-K, ~~presents~~present our key operating data for the years ended December 31, ~~2013,~~ 2014, 2015, and ~~2015~~2016 and for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~2016:~~2017:


Gasoline gallon equivalents delivered (in millions)	Year Ended December 31, 2013	Year Ended December 31, 2014	Year Ended December 31, 2015	Three Months Ended September 30, 2015	Three Months Ended September 30, 2016	Nine Months Ended September 30, 2015	Nine Months Ended September 30, 2016	Year Ended December 31, 2014	Year Ended December 31, 2015	Year Ended December 31, 2016	Three Months Ended March 31, 2016	Three Months Ended March 31, 2017
CNG (1)	143.9	182.6	229.2	61.1	66.7	168.5	191.7	182.6	229.2	259.2	61.1	68.5
RNG (2)	10.5	12.2	8.8	1.3	0.7	7.7	2.3	12.2	8.8	3.0	1.0	0.6
LNG	60.0	70.3	70.5	18.2	17.1	54.0	50.9	70.3	70.5	66.8	15.4	16.0
Total	214.4	265.1	308.5	80.6	84.5	230.2	244.9	265.1	308.5	329.0	77.5	85.1


Gasoline gallon equivalents delivered (in millions)	Year Ended December 31, 2013	Year Ended December 31, 2014	Year Ended December 31, 2015	Three Months Ended September 30, 2015	Three Months Ended September 30, 2016	Nine Months Ended September 30, 2015	Nine Months Ended September 30, 2016	Year Ended December 31, 2014	Year Ended December 31, 2015	Year Ended December 31, 2016	Three Months Ended March 31, 2016	Three Months Ended March 31, 2017
O&M	108.7	137.3	159.3	41.5	45.7	118.7	130.4	137.3	159.3	176.6	40.3	46.7
Fuel (1)	86.4	108.2	130.1	33.3	32.3	95.0	96.8	108.2	130.1	128.5	31.9	32.6
Fuel and O&M (3)	19.3	19.6	19.1	5.8	6.5	16.5	17.7	19.6	19.1	23.9	5.3	5.8
Total	214.4	265.1	308.5	80.6	84.5	230.2	244.9	265.1	308.5	329.0	77.5	85.1


Other Operating data (in thousands)	Year Ended December 31, 2013			Year Ended December 31, 2014			Year Ended December 31, 2015			Three Months Ended September 30, 2015			Three Months Ended September 30, 2016			Nine Months Ended September 30, 2015			Nine Months Ended September 30, 2016
Other operating data (in millions)																						Year Ended December 31, 2014			Year Ended December 31, 2015			Year Ended December 31, 2016			Three Months Ended March 31, 2016		Three Months Ended March 31, 2017
Station construction cost of sales																						56.3			32.3			57.0			11.3		8.4
Gross margin	$	127,713		$	120,153		$	125,835		25,534			35,159			69,731			110,983			$	120.2		$	125.8		$	147.1		36.5		28.6
Net income (loss) attributable to Clean Energy Fuels. Corp (4)	$	(66,968	)	$	(89,659	)	$	(134,242	)	$	(23,119	)	$	(12,628	)	$	(84,228	)	$	(8,270	)	$	(89.7	)	$	(134.2	)	$	(12.2	)	$	2.8	$	61.1

(1) As noted above, amounts include our proportionate share of the GGEs sold as CNG by our joint venture ~~MCEP and our former joint venture in Peru.~~MCEP. GGEs sold by ~~these~~this joint ~~ventures~~venture were ~~2.1 million,~~ 0.0 million, 0.4 million, and ~~0.4~~0.5 million, for the years ended December 31, ~~2013,~~ 2014, 2015, and ~~2015, respectively. Our joint venture MCEP had volumes of~~2016, respectively, and 0.1 million and 0.1 million for the three months ended ~~September 30, 2015~~March 31, 2016 and ~~2016, respectively and 0.3 million and 0.4 million, for the nine months ended September 30, 2015 and 2016,~~2017, respectively.

(2) Represents RNG sold as non-vehicle fuel. RNG sold as vehicle fuel, also known as Redeem™, is included in CNG and LNG.


(3)	Represents gasoline gallon equivalents at stations where we provide both fuel and O&M services.

(4)

Includes the following amounts of ~~revenue pursuant to a federal alternative fuels tax credit ("VETC"): $45.4 million,~~VETC: $28.4 million, $31.0 million, $26.6 million for the years ended December 31, ~~2013,~~ 2014, 2015, ~~respectively; $0.0~~and 2016, respectively, and $6.4 million and ~~$6.7~~$0.0 million for the three months ended ~~September 30, 2015~~March 31, 2016 and ~~2016, respectively and $0.0 million and $19.6 million for the nine months ended September 30, 2015 and 2016,~~2017, respectively. See the discussion under ~~“Operations—VETC”~~“Recent Developments—VETC Expiration” below.

Recent Developments

Asset Sale. On February 27, 2017, Clean Energy Renewable Fuels ("Renewables"), our subsidiary, entered into an asset purchase agreement (the “APA”) with BP Products North America, Inc. (“BP”), pursuant to which Renewables agreed to sell to BP certain assets relating to its RNG production business (the “Asset Sale”), consisting of Renewables’ two existing RNG production facilities, Renewables’ interest in the RNG Ventures and Renewables’ third-party RNG supply contracts (the “Assets”). The Asset Sale was completed on March 31, 2017 for a sale price of $155.5 million, plus BP assumed the obligations under the Canton Bonds (as defined in Note 12) which totaled $8.8 million as of March 31, 2017.

On March 31, 2017, BP paid Renewables $30.0 million in cash and delivered to Renewables a promissory note with a principal amount of $123.5 million (the promissory note was paid in full on April 3, 2017). In addition, BP is obligated to pay Renewables $2.0 million related to the determination of certain post-closing adjustments. As defined in the APA, the valuation date of the Asset Sale was January 1, 2017, and as such the APA included certain adjustments to the purchase price to reflect a determination of the amount of cash accumulated by Renewables from the valuation date to the closing date, net of permitted cash outflows. Control of the Assets was not transferred until the Asset Sale was completed on March 31, 2017. Accordingly, the full operating results of Renewables are included in the condensed consolidated statement of operations for the three months ended March 31, 2017.

In addition, under the APA, BP is required, following the closing of the Asset Sale, to pay Renewables up to an additional $25.0 million in cash over a five-year period if certain performance criteria relating to the Assets are met.

We incurred $3.7 million in transaction fees in connection with the Asset Sale. Also, subsequent to March 31, 2017, we paid $8.6 million in cash and issued 770,269 shares of common stock to holders of Renewables Option Awards (as defined and discussed below). The net proceeds from the Asset Sale were $143.2 million.

Following completion of the Asset Sale, we are continuing to procure RNG from BP under a long-term supply contract and from other RNG suppliers, and resell such RNG through our natural gas vehicle fueling infrastructure as Redeem, our RNG vehicle fuel. We collect royalties from BP on gas purchased from BP and sold as Redeem™ at our stations, which royalty is in addition to any payment obligation of BP under the APA.

Renewables Options. In September 2013, Renewables established the 2013 Unit Option Plan (the “Renewables Plan”) and granted unit option awards thereunder (the “Renewables Option Awards”) to certain of its service providers. In connection with the closing of the Asset Sale, all holders of outstanding Renewables Option Awards entered into a surrender agreement with us and Renewables, pursuant to which (i) all Renewables Option Awards held by holders who were not members of Renewables’ Board of Managers were surrendered and canceled in full in exchange for, upon the closing of the Asset Sale and Renewables’ receipt of any future cash payment pursuant to the terms of the APA, a cash payment in an amount determined based on such holder’s percentage ownership of Renewables following a cashless “net exercise” of such holder’s Renewables Option Awards, and (ii) all Renewables Option Awards held by members of Renewables’ Board of Managers were surrendered and canceled in full in exchange for, upon the closing of the Asset Sale and Renewables’ receipt of any future cash payment pursuant to the terms of the APA, awards of shares of our common stock (the “Company Stock Awards”). The number of shares of our common stock subject to each Company Stock Award was calculated by dividing the cash payment to which the applicable holder would have been entitled as described in (i) above by the closing price of our common stock on March 31, 2017, the closing date of the Asset Sale. All Company Stock Awards were granted under our 2016 Performance Incentive Plan and are fully vested upon grant, and the shares subject to such awards are freely tradable upon issuance, subject to applicable securities laws relating to shares held by our affiliates.

Debt Repurchase. In February 2017, we purchased from one of our directors and significant stockholders, T. Boone Pickens ("Mr. Pickens"), the 7.5% Convertible Note due July 2018 having an outstanding principal amount of $25.0 million held by Mr. Pickens for a cash purchase price of $21.75 million. See Note 12 to the condensed consolidated financial statements included in this report for additional information about our outstanding debt.

VETC Expiration. On December 31, 2016, the VETC alternative fuels tax credit expired and ceased to be available and may not be available in any subsequent period. Under VETC, we were eligible to receive credits of $0.50 per gasoline gallon equivalent of CNG and $0.50 per diesel gallon equivalent of LNG that we sold as a vehicle fuel from January 1, 2016 through December 31, 2016.

Business Risks and Uncertainties

Our business and prospects are exposed to numerous risks and uncertainties. For more information, see “Risk Factors” in Part II, Item 1A of this report.

Key Trends

Recent Trends

Market for Natural ~~Gas - Demand and Pricing.~~Gas. CNG and LNG are generally less expensive than gasoline and diesel on an energy equivalent ~~basis and,~~basis. Additionally, according to studies conducted by the California Air Resources Board ("CARB") and Argonne National Laboratory, a research laboratory operated by the University of Chicago for the ~~United States~~U.S. Department of Energy, CNG and LNG are cleaner than gasoline and diesel fuel. According to the U.S. Energy Information Administration, demand for natural gas fuels in the United States has increased in recent years and is expected to continue to increase. We believe this growth in demand in recent years is attributable primarily to the higher prices of gasoline and diesel relative to CNG and LNG during much of this period, increasingly stringent environmental regulations affecting vehicle fleets and increased ~~availability~~supply of natural gas.

~~In the recent past,~~Since approximately mid-2014, however, the prices of oil, gasoline, diesel and natural gas have been significantly lower and volatile, and these trends of lower prices and volatility may continue. These conditions have resulted in lower revenue levels in certain periods, due in large part to a decreased pricing advantage when comparing natural gas prices to diesel and gasoline prices, which we believe has decreased overall demand for natural gas as a vehicle fuel, and such conditions have also caused us to reduce the ~~reduced~~ prices we have been charging our customers for CNG and ~~LNG. As~~LNG in certain periods, which has reduced our profit margins. Additionally, to the extent these conditions have contributed to decreased demand or slowed growth in the market for natural gas as a ~~result~~vehicle fuel, we believe they have also contributed to decreases in compressor and station construction activity in certain periods, as the success of these components of our operations is dependent upon the success of the ~~lower prices, our profit margins were reduced, but to a lesser degree, due to reduced~~ natural gas ~~commodity costs. To the extent~~vehicle fuels market generally. If these volatile and lower-pricing conditions and other uncertainties persist, our financial results may continue to be adversely affected.

Our Performance. Our gross revenue is mostly ~~comprised~~consists of volume related revenue, compressor and other equipment sales, station construction sales, ~~sales of tradable credits~~ and historically, VETC revenue. Our revenue can vary between periods due to a variety of factors, including natural gas prices and sale activity, fluctuations in commodity costs, the amount and timing of recognition of government credits, sales of RINs and LCFS Credits, compressor and other equipment sales ~~recognition of VETC~~ and ~~other credits as well as natural gas prices and sale activity.~~station construction sales. Our volume-related ~~revenues,~~revenue, which ~~are~~is further discussed below, increased ~~across all~~from 2014 to 2016 and from the first three months of ~~these periods,~~2016 to the same period in 2017, due largely to the increase in gallons we ~~delivered.~~delivered and increased sales of tradable credits.

Our cost of sales can also vary between periods due to a variety of factors, including ~~commodity costs of fuel,~~ the amount and timing of ~~compressor~~our billing, collections and liability payments and the factors described above.

In addition, our performance in certain recent periods has been materially affected by certain non-cash charges relating to particular transactions or events. For example, our results for the quarterly periods ended March 31, 2016 and March 31, 2017 were positively affected by non-cash gains related to repurchases or retirements of certain of our outstanding convertible debt, and our results for the quarterly period ended March 31, 2017 were also positively affected by a significant non-cash gain related to the Asset Sale. These or other ~~equipment sales~~gains or losses may not recur regularly, in the same amounts or at all in future periods and, ~~station construction sales,~~with respect to non-cash gains and ~~natural gas prices and sale activity.~~losses, they do not impact our liquidity.

See "Results of Operations" below for a further discussion of our performance.

Volume-Related ~~Revenues.~~Revenue. The amount of CNG, LNG and RNG GGEs we delivered increased by ~~43.9%~~24.1% from ~~2013~~2014 to ~~2015~~2016 and by ~~6.4%~~9.8% from the first ~~nine~~three months of ~~2015~~2016 compared to the same period in ~~2016.~~2017.

The RNG we sell for vehicle fuel, which is delivered in the form of CNG or LNG is distributed under the name Redeem™. The amount of Redeem vehicle fuel we delivered increased from 20.2 million GGEs in 2014 to ~~50.1~~58.6 million GGEs in ~~2015,~~2016, a ~~148% increase. Further, we delivered 43.7 million GGEs of Redeem during the nine months ended September 30, 2016, compared to 36.0 million GGEs during the nine months ended September 30, 2015, a 21.4%~~190.1% increase. We expect our Redeem™ business will continue to grow.

We believe ~~this~~ demand for Redeem™ is largely attributable to ~~its production of~~the lower greenhouse gas emissions ~~than~~that it produces relative to gasoline and diesel.

Our sales of increasing volumes of CNG, LNG and RNG for use as a vehicle fuel has resulted in our generation of increasing amounts of RINs and LCFS Credits which, together with the increasing prices for RINs and LCFS Credits, has resulted in increased ~~revenues~~revenue associated with these credits. ~~Historically,~~

The following table summarizes our revenue from RINs and LCFS Credits in the periods presented:



	Three Months Ended March 31,
(In millions)	2016		2017
RIN Credits	$	5.6	$	9.7
LCFS Credits	5.4		2.5
Total	$	11.0	$	12.2

Although we expect to continue to generate revenue relating to the sale of RINs and LCFS Credits from our continued sales of our Redeem RNG vehicle fuel, we expect the amount of revenue we will receive from the sale of these credits to decrease as a result of the Asset Sale, which will adversely affect our results of operations, in particular our volume -related revenue, and reduce our effective price per gallon in future periods as compared to prior periods. Pursuant to the terms of the APA, $5.1 million of revenue attributable to sales of RINs and LCFS Credits were included as a reduction of the gain from the Asset Sale, as an adjustment to the purchase price (See Note 2).

The markets for RINs and LCFS Credits have historically been volatile, and the prices for these credits have been subject to significant fluctuations.

Additionally, the value of RINs and LCFS Credits may be adversely affected by any changes to the federal and state programs under which such credits are generated and sold. For example, CARB recently raised the carbon intensity rating of the RNG we sell in California, which will reduce the amount of LCFS Credits we generate.

~~Our Stations.~~ The number of fueling stations we owned, operated, maintained and/or supplied increased from 471 at January 1, 2013 to over 575 at September 30, 2016 (a 22.1% increase). Included in this number are all of the CNG and LNG fueling stations we own, operate, maintain or with which we have a fueling supply contract.

We have made a significant commitment of capital and other resources to build a nationwide network of natural gas truck friendly fueling stations, which we refer to as "America's Natural Gas Highway" or "ANGH." At September 30, 2016, we had 39 completed ANGH stations that were not open for fueling operations. We expect to open such stations when we have sufficient customers to fuel at the locations, and we do not know when this will occur. We believe that growth of heavy-duty truck customers depends, in part, on the development and adoption of natural gas engines that are well-suited for use by heavy-duty trucks, which has been slower and more limited than anticipated. If these customers do not develop and if we do not open these stations, we will continue to have substantial investments in assets that do not produce revenues equal to or greater than their costs. Additionally,

most of our ANGH stations were initially built to provide LNG, which typically costs more than CNG on an energy equivalent basis; however, because operators are adopting both LNG heavy-duty trucks and CNG heavy-duty trucks, we designed these stations to be capable of dispensing both fuels. Where we deem appropriate, we have been investing, and expect to continue to invest, additional capital in our ANGH stations to add CNG fueling. To help accelerate the adoption by heavy-duty truck fleets of natural gas, we have negotiated favorable CNG and LNG tank pricing from manufacturers, which we are passing through to our customers.

~~Recent Developments~~

On February 29, 2016, we entered into a loan and security agreement with, and issued a related promissory note to, PlainsCapital Bank ("Plains"), pursuant to which Plains agreed to lend us up to $50.0 million on a revolving basis for a term of one year (the "Credit Facility"). Simultaneously, we drew down $50.0 million under the Credit Facility, which we repaid in full as of September 30, 2016. On October 31, 2016, the Credit Facility's maturity date was extended from February 28, 2017 to September 30, 2018.

On March 1, 2016 and pursuant to the consent of the holders of our outstanding 7.5% convertible promissory notes due in August 2016 (the "SLG Notes"), we prepaid in cash an aggregate of $60.0 million in principal amount and $1.8 million in accrued and unpaid interest owed under the SLG Notes. Additionally, on July 14, 2016, we entered into separate privately negotiated exchange agreements with each holder of an SLG Note to exchange the outstanding principal amount of each SLG Note, totaling $85.0 million for all SLG Notes, and all accrued and unpaid interest thereon, totaling $0.2 million for all SLG Notes, for an aggregate of 14,000,000 shares of our common stock and $38.2 million in cash. We recognized a loss of $0.9 million for the nine months ended September 30, 2016 related to the settlement of the SLG Notes. The repurchased and exchanged SLG Notes have been terminated and canceled in full and we have no further obligations under the SLG Notes.

Our board of directors has authorized and approved the use of up to $50.0 million to opportunistically purchase our outstanding 5.25% Convertible Senior Notes due 2018 (the "5.25% Notes") in the open market, in accordance with the terms of the indenture governing the 5.25% Notes. Pursuant to this approval, in the nine months ended September 30, 2016, we paid an aggregate of $24.9 million in cash to repurchase and retire $45.4 million in aggregate principal amount of 5.25% Notes, together with accrued and unpaid interest thereon. Additionally, pursuant to a privately negotiated exchange agreement with certain holders of the 5.25% Notes, on May 4, 2016, we issued an aggregate of 6,265,829 shares of our common stock in exchange for an aggregate principal amount of $25.0 million of 5.25% Notes held by such holders, together with accrued and unpaid interest thereon. Our repurchase and exchange of 5.25% Notes in the nine months ended September 30, 2016 resulted in a total gain of $26.3 million recorded during the period. All repurchased and exchanged 5.25% Notes have been surrendered to the trustee for such notes and canceled.

~~See Note 10 to the condensed consolidated financial statements included in this report for additional information about our outstanding debt.~~

On September 9, 2016, we entered into an amended and restated equity distribution agreement with Citigroup Global Markets Inc. ("Citigroup"), as sales agent and/or principal, pursuant to which we may issue and sell, from time to time, through or to Citigroup, shares of our common stock having an aggregate offering price of up to $110.0 million in an "at-the-market" offering program (the "ATM Program").

Anticipated Future Trends

Although natural gas continues to be less expensive than gasoline and diesel in most markets, the price of natural gas vehicle fuel has been ~~significantly~~ closer to the prices of gasoline and diesel in recent years as a result of lower oil prices, thereby reducing the price advantage of natural gas as a vehicle fuel. We anticipate that, over the long term, the prices for gasoline and diesel will continue to be higher than the price of natural gas as a vehicle fuel and will increase overall, which would improve the cost savings of natural gas ~~as a vehicle fuel~~ compared to gasoline and diesel. It is uncertain, however, whether the prices for gasoline and diesel will increase from their current levels, and we expect that adoption of natural gas as a vehicle fuel and growth in our customer base and revenue will be negatively affected while ~~the low~~ oil and diesel ~~price conditions continue.~~prices remain low. Our belief that natural gas will continue, over the long term, to be a cheaper vehicle fuel than gasoline or diesel is based in large part on the growth in recent years of natural gas production in the United States, as well as increasingly stringent environmental regulations affecting vehicle ~~fleets.~~fleets, which we believe drives the market for alternative fuels generally.

We believe natural gas fuels are well-suited for use by vehicle fleets that consume high volumes of fuel, refuel at centralized locations or along well-defined routes and/or are increasingly required to reduce emissions. As a result, we believe that despite the conditions described in the previous paragraph there will be growth in the consumption of natural gas as a vehicle fuel among vehicle fleets, and our goal is to capitalize on this trend, if and ~~to the extent~~when it ~~materializes, and to enhance our leadership position in these markets.~~materializes. Our business plan calls for expanding our sales of natural gas ~~fuels~~vehicle fuel in the markets in which we operate, including heavy-duty trucking, airports, refuse, public transit,

government fleets and industrial and institutional energy users, and pursuing additional markets as opportunities arise. Additionally, we expect that the lower greenhouse gas emissions ~~produced by~~associated with our Redeem vehicle fuel will result in ~~continued~~ increased demand for ~~and~~this fuel, resulting in our delivery of increasing volumes of Redeem to our vehicle fleet ~~customers in the future.~~customers. If these projections materialize and our business grows as we anticipate, then our operating costs and capital expenditures ~~may~~will increase, primarily from the anticipated expansion of our station network, ~~and RNG production capacity and~~ additional investments in ANGH stations to add CNG fueling, purchases of additional CNG trailers by NG Advantage, LNG plant maintenance costs, and increased RNG purchases from third-party producers, as well as the logistics of delivering more natural gas fuel to our customers. We also may seek to acquire assets and/or businesses that are in the natural gas fueling infrastructure, ~~or RNG production business,~~ which may require us to spend additional capital.

~~Although we~~We expect competition in the market for natural gas vehicle fuel to remain steady in the near-term, ~~we expect~~but anticipate that competition in ~~the alternative~~vehicle fuels market generally to increase. Any such increased competition ~~would~~may reduce our customer base and revenue and may lead to amplified pricing pressure, reduced operating margins and fewer expansion opportunities.

~~Liquidity and Capital Resources~~

~~Our business plan calls for approximately $25.5 million in capital expenditures for all of 2016, primarily related~~Several factors create potential uncertainties relating to the construction of CNG and LNG fueling stations (including adding CNG fueling to ANGH stations) and the purchase of CNG trailers by our subsidiary, NG Advantage, LLC ("NG Advantage") and to a lesser extent, LNG plant maintenance costs and RNG plant construction and maintenance costs. Additionally, we had total indebtedness of $355.5 million in principal amount as of September 30, 2016.

We may also elect to invest additional amounts in companies, assets or joint ventures in the natural gas fueling infrastructure, vehicle or services industries, including RNG production, or use capitalfuture market for other activities or pursuits. We will need to raise additional capital to fund any capital expenditures, investments or debt repayments that we cannot fund through available cash or cash provided by our operations or that we cannot fund through other sources, such as with our common stock. We may not be able to raise capital when needed on terms that are favorable to us or our stockholders, or at all. Any inability to raise capital may impair our ability to build new stations, develop natural gas fueling infrastructure, invest in strategic transactions or acquisitions or repay our outstanding indebtedness and may reduce our ability to grow our business and generate sustained or increased revenues. See "Liquidity and Capital Resources" below.

~~Business Risks and Uncertainties~~

~~Our business and prospects are exposed to numerous risks and uncertainties. For more information, see “Risk Factors” in Part II, Item 1A of this report.~~

~~Operations~~

~~The following discussion describes the various components of our operations.~~

~~CNG Sales~~

We sell CNG through fueling stations and by transporting it to customers that do not have direct access to a natural gas pipeline. CNG fueling station sales are made through stations located on our customers’ properties and through our network of public access fueling stations. At these CNG fueling stations, we typically procure natural gas from local utilities or third-party marketers and then compress and dispense it into our customers' vehicles. Our CNG fueling station sales are made primarily through contracts with our customers. Under these contracts, pricing is principally determined on an index-plus basis, which is calculated by adding a margin to the local index or utility price for natural gas. As a result, CNG sales revenues determined by an index-plus methodology increase or decrease as a result of an increase or decrease in the price of natural gas. The remainder of our CNG fueling station sales are on a per fill-up basis at prices we set at public access stations based on prevailing market conditions. We purchase some natural gas for CNG sales from third-parties under “take or pay” contracts that require us to purchase minimum volumes of natural gas.

~~LNG Production and Sales~~

~~We obtain LNG from our own plants as well as through relationships with suppliers. We own and operate LNG liquefaction plants near Houston, Texas and Boron, California.~~

We sell LNG on a bulk basis to fleet customers, that often own and operate their fueling stations, and we also sell LNG to fleet and other customers at our network of public access fueling stations. We also sell LNG for non-vehicle purposes, including to

customers who use LNG in oil fields or for industrial or utility applications. In 2015 and the first nine months of September 30, 2016, we purchased 43% and 44%, respectively, of our LNG from third-party producers, and we produced the remainder of our LNG at our liquefaction plants in Texas and California. We purchase some LNG from third-parties under “take or pay” contracts that require us to purchase minimum volumes of LNG.

We deliver LNG via our fleet of 84 tanker trailers to fueling stations, where it is stored and dispensed in liquid form into vehicles. As with our CNG customer contracts, we sell LNG through supply contracts that are priced on an index-plus basis, such that LNG sales revenues from these contracts increase or decrease as a result of an increase or decrease in the price of natural gas. We also sell LNG on a per fill-up basis at prices we set at public access stations based on prevailing market conditions. LNG generally costs more than CNG, as LNG must be liquefied and transported.

~~VETC~~

Under separate pieces of U.S. federal appropriations legislation from October 1, 2006 through December 31, 2014, we were eligible to receive a federal alternative fuels tax credit (“VETC”) of $0.50 per gasoline gallon equivalent of CNG and $0.50 per liquid gallon of LNG that we sold as vehicle fuel. In December 2015, Congress passed the Consolidated Appropriations Act that included the passage of an alternative fuel tax credit which we continue to refer to as VETC. The credit was made retroactive to January 1, 2015 and extended through December 31, 2016, except that the alternative fuel tax credit for LNG sold as a vehicle fuel in 2016 was changed to be based on the diesel gallon equivalent of LNG sold rather than the liquid gallon of LNG sold. As a result, we were eligible to receive a credit of $0.50 per gasoline gallon equivalent of CNG sold as a vehicle fuel in 2015 and 2016, $0.50 per liquid gallon of LNG sold in 2015 and $0.50 per diesel gallon equivalent of LNG sold in 2016. The diesel gallon equivalent for the VETC credit for LNG sales in 2016 is expected to result in lower revenues than the VETC credit for LNG sales in 2015.

Based on the service relationship with our customers, either we or our customers claim the credit. We recorded these tax credits as revenues in our condensed consolidated statements of operations, as the credits are fully payable and do not need to offset tax liabilities to be received. As such, the credits are not deemed income tax credits under the accounting guidance applicable to income taxes. In addition, we believe the credits are properly recorded as revenue because we often incorporate the tax credits into our pricing with our customers, thereby lowering the actual price per gallon we charge.

VETC revenues for 2015, totaling $31.0 million, were all recognized in December 2015. VETC revenues for the three and nine month period ended September 30, 2016 totaled $6.7 million and $19.6 million, respectively.

~~O&M Services~~

We generate revenues from our performance of O&M services for CNG and LNG fueling stations that we do not own. For these services we generally charge a fixed fee or a per-gallon fee based on the volume of fuel dispensed at the station. We include the volume of fuel dispensed at the stations at which we provide O&M services in our calculation of aggregate gasoline gallon equivalents delivered.

~~Station Construction and Engineering~~

We generate revenues from designing and constructing fueling stations, facility modifications, and selling or leasing some of the stations to our customers. For these projects, we typically act as the general contractor or supervise qualified third-party contractors. We also offer assessment, design and modification solutions to provide operators with code-compliant service and maintenance facilities for natural gas vehicle fleets. For example, our NGV Easy Bay™ product is a natural gas vapor leak barrier developed specifically for natural gas vehicle facilities. We charge construction or other fees or lease rates based on the size and complexity of the project.

~~RNG Production and Sales~~

Our subsidiary, Clean Energy Renewables, owns RNG production facilities located at Republic Services landfills in Canton, Michigan and North Shelby, Tennessee. Clean Energy Renewables has entered into long-term fixed-price sale contracts for the majority of the RNG that we expect these facilities to produce over the next seven years. We are seeking to expand our RNG business by pursuing additional RNG production projects, either on our own or with project partners. We sell most of the RNG we produce through our natural gas fueling infrastructure for use as a vehicle fuel. In addition, we purchase RNG from third-party producers, and sell that RNG for vehicle fuel use through our fueling infrastructure. The RNG we sell for vehicle fuel use is distributed under the name ~~Redeem™.~~

~~Natural Gas Fueling Compressors~~

Clean Energy Compression manufactures, sells and services non-lubricated natural gas fueling compressors and related equipment for the global natural gas fueling market. Clean Energy Compression is headquartered near Vancouver, British Columbia, has an additional manufacturing facility near Shanghai, China and has sales and service offices in Bangladesh, Colombia, Peru and the United States.

~~Sales of RINs and LCFS Credits~~

We generate RIN Credits when we sell RNG for use as a vehicle fuel in the United States, and we generate LCFS Credits when we sell RNG and conventional natural gas for use as a vehicle fuel in California and Oregon. We can sell these credits to third parties who need the RINs and LCFS Credits to comply with federal and state requirements. Generally, the amount of RINS and LCFS Credits we generate increases as we sell higher volumes of natural gas as a vehicle ~~fuel, but the amount of these credits that we sell~~fuel. These factors include growing favor among lawmakers, regulators, other policy makers, environmental groups and ~~our revenues from these sales can vary depending on the market~~other powerful organizations for ~~these credits, which has historically been volatile and subject to significant price fluctuations, and changes to applicable regulations.~~

During the three months ended September 30, 2015, we realized $2.4 million and $2.3 million in revenue from the sale of RIN Credits and LCFS Credits, respectively. During the three months ended September 30, 2016, we realized $7.0 million and $4.3 million in revenue from the sale of RIN Credits and LCFS Credits, respectively. During the nine months ended September 30, 2015, we realized $7.7 million and $4.4 million in revenue from the sale of RIN Credits and LCFS Credits, respectively. During the nine months ended September 30, 2016, we realized $20.0 million and $15.2 million in revenue from the sale of RIN Credits and LCFS Credits, respectively. The markets for RINs and LCFS Credits are volatile,electric and/or hydrogen-powered vehicles, and the ~~prices for such credits are subject to significant fluctuations. Further, the value~~availability and effect on our business of ~~RINs~~environmental and ~~LCFS Credits will be adversely affected by any changes to the federal and state~~other regulations, programs ~~under which such credits are generated and sold.~~or incentives.

~~Vehicle Acquisition and Finance~~

We offer vehicle finance services, including loans and leases, to help our customers acquire natural gas vehicles. As appropriate, we apply for and receive federal and state incentives associated with natural gas vehicle purchases and pass these benefits through to our customers. For 2015 and through September 30, 2016, we have not generated significant revenue from vehicle financing activities.

Debt Compliance

Certain of the agreements governing our outstanding debt, which are discussed in Note ~~10,~~12 to our condensed consolidated financial statements included in this report, have certain non-financial covenants with which we must comply. As of ~~September 30, 2016,~~March 31, 2017, we were in compliance with all of these covenants.

Risk Management Activities

Our risk management activities are discussed in the MD&A of our ~~2015~~2016 Form 10-K. In the three months ended ~~September 30, 2016,~~March 31, 2017, there were no material changes to our risk management activities.

Critical Accounting Policies

We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements.

Revenue recognition;

Impairment of goodwill and long-lived assets;

Income taxes; and

Fair value estimates

Our critical accounting policies and estimates are discussed in the MD&A of our ~~2015~~2016 Form 10-K. For the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, there were no material changes to our critical accounting ~~policies except for the following changes to our Revenue Recognition policy pertaining to station construction sales.~~policies.

Beginning January 1, 2016, we began using the percentage of completion method to recognize revenue for station construction projects using the cost-to-cost method. Under this method, we estimated the percentage of completion of a project based on the costs incurred to date for the associated contract in comparison to the estimated total costs for such contract at completion. Historically, we recognized revenue on station construction projects using the completed-contract method because it did not have a reliable means to make estimates of the percentage of the contract completed. Under the completed contract method, the construction projects were considered substantially complete at the earlier of customer acceptance of the fueling station or the

~~time when fuel dispensing activities at the station began. The sale of compressors and related equipment continues to be recognized under the percentage of completion method as in previous periods.~~

Effective January 1, 2016, we implemented a cost tracking system that provides for a detailed tracking of costs incurred on its station construction projects on a project by project basis. We also changed related accounting activities and processes to timely identify and monitor costs. As a result of this implementation, we are able to make reliable estimates as to the percentage of a project that is complete at the end of each reporting period.

We consider unapproved change orders to be contract variations for which the customer has approved the change of scope but an agreement has not been reached as to an associated price change. Change orders that are unapproved as to both price and scope are evaluated as claims. Claims have historically been insignificant.

Recently Issued and Adopted Accounting Standards

For a description of recently issued and adopted accounting standards, see Note 1618 to the condensed consolidated financial statements included in this report.

Results of Operations

Three Months Ended ~~September 30, 2015~~March 31, 2016 Compared to Three Months Ended ~~September 30, 2016~~March 31, 2017

The table below presents our results of operations as a percentage of total revenue and the narrative that follows provides a detailed discussion of certain line items for the periods presented.


	Three Months Ended September 30,				Three Months Ended March 31,
	2015		2016		2016		2017
Statement of Operations Data:
Revenue:
Product revenues	83.8	%	87.1	%
Service revenues	16.2		12.9
Total revenues	100.0		100.0
Product revenue					87.7	%	85.2	%
Service revenue					12.3		14.8
Total revenue					100.0		100.0
Operating expenses:
Cost of sales (exclusive of depreciation and amortization shown separately below):
Product cost of sales	64.3		57.2		55.7		61.0
Service cost of sales	8.0		6.6		6.1		7.0
Gain from change in fair value of derivative warrants	(0.5	)	0.0
Selling, general and administrative	30.1		26.7		26.7		26.6
Depreciation and amortization	15.2		15.3		15.6		17.1
Total operating expenses	117.1		105.8		104.1		111.7
Operating loss	(17.1	)	(5.8	)	(4.1	)	(11.7	)
Gain (loss) from extinguishment of debt, net	—		(0.7	)
Interest expense, net	(11.0	)	(6.5	)
Interest expense					(9.7	)	(5.5	)
Interest income					0.1		0.2
Other income (expense), net	2.9		(0.1	)	0.3		(0.2	)
Loss from equity method investments	(0.2	)	0.0		(0.1	)	0.0
Loss before income taxes	(25.4	)	(13.1	)
Gain from extinguishment of debt					16.6		3.6
Gain from sale of certain assets of subsidiary					—		78.9
Income before income taxes					3.1		65.3
Income tax benefit (expense)	0.3		(0.4	)	(0.4	)	2.5
Net loss	(25.1	)	(13.5	)
Loss from noncontrolling interest	0.1		0.4
Net loss attributable to Clean Energy Fuels Corp.	(25.0	)%	(13.1	)%
Net income					2.7		67.8
Loss attributable to noncontrolling interest					0.3		0.4
Net income attributable to Clean Energy Fuels Corp.					3.0	%	68.2	%

Revenue. Revenue ~~increased~~decreased by ~~$4.7~~$6.3 million to ~~$97.0~~$89.5 million in the three months ended ~~September 30, 2016~~March 31, 2017, from ~~$92.3~~$95.8 million in the three months ended ~~September 30, 2015.~~March 31, 2016. This ~~increase~~decrease was primarily due to ~~increased volumes, increased~~the expiration of VETC and lower compressor and station construction sales, ~~and increased VETC revenues,~~ partially offset by ~~lower compressor sales.~~an increase in volume -related revenue.

Volume ~~related revenues~~-related revenue increased by ~~$3.4~~$5.8 million between periods primarily due to an increase of ~~3.9~~7.6 million gallons ~~delivered, which provided approximately $3.2 million of increased revenue.~~delivered. This increase in gallons delivered was due to a ~~5.6~~7.4 million gallon increase in CNG gallons delivered, which was primarily attributable to 20 new refuse customers, ~~six~~eight new transit customers, and two new trucking customers. This increase was also due to a 0.6 million increase in LNG gallons delivered partially offset by a ~~0.6~~0.4 million decrease in RNG gallons delivered ~~for~~as non-vehicle fuel and a 1.1 million decrease in LNG gallons delivered. Additionally, approximately $0.2 million of the increase in volume related revenues was the result of an increase in the effective price charged per gallon delivered.fuel. Our effective price per gallon charged was ~~$0.85~~$0.87 for the ~~2016~~2017 period, a $0.01 per gallon ~~increase~~decrease from ~~$0.84~~$0.88 per gallon for the ~~2015~~2016 period. The ~~increase~~decrease in our effective price charged was primarily due to ~~increased RINs and LCFS Credits sales, which do not result in increased costs. The~~lower retail prices driven by lower prices for competing fuels. Our effective price per gallon is defined as ~~revenues~~revenue generated from selling CNG, LNG, RNG, and any related RINs and LCFS Credits and providing O&M services to our vehicle fleet customers at stations ~~that~~ we do not own and for which we receive a per-gallon or fixed fee, all divided by the total GGEs delivered less GGEs delivered by non-consolidated entities, such as entities that are accounted for under the equity method.

~~VETC revenues increased~~Compressor revenue from Clean Energy Compression decreased by ~~$6.7~~$1.8 million between periods ~~as VETC~~due to lower compressor sales, which was not in effect in the third quarter of 2015 because all VETC revenues for 2015 were recognized in December 2015 when Congress passed the Consolidated Appropriations Act that included an alternative fuel tax credit.due to continued low global demand.

Station construction sales ~~increased~~decreased by ~~$2.2~~$4.0 million between periods, principally from the sale of ~~more~~fewer full station projects than station upgrades in the ~~2016~~2017 period, as full station projects generally have substantially higher price points than station upgrades.

~~These~~VETC revenue ~~increases were partially offset~~decreased by ~~a decrease in Clean Energy Compression's revenue of $7.6~~$6.4 million between periods ~~which we believe is~~ due to the ~~effects~~expiration of ~~continued lower global oil prices, the strength of the U.S. dollar and slower than expected sales in China.~~VETC on December 31, 2016.

Cost of sales. Cost of sales ~~decreased~~increased by ~~$4.8~~$1.6 million to ~~$61.9~~$60.9 million in the three months ended ~~September 30, 2016,~~March 31, 2017, from ~~$66.7~~$59.3 million in the three months ended ~~September 30, 2015. This decrease was~~March 31, 2016. Our cost of sales increased by $6.6 million primarily due to ~~a $6.2 million decrease in compressor costs between periods, as a result of decreased compressor sales and a $0.6 million decrease in gas commodity costs between periods as a result of a decrease in~~increased natural gas ~~prices~~volumes delivered, and to a lesser extent the increase in the cost of natural gas (discussed below). These ~~decreases~~increases were partially offset by a ~~$2.0~~$2.9 million ~~increase~~decrease between periods in costs related to ~~increased~~lower station construction sales, and a $2.1 million decrease between ~~periods.~~periods in compressor costs due to lower compressor sales.

Our effective cost per gallon ~~decreased~~increased by $0.03 per gallon between periods, to $0.55 per gallon in the three months ended March 31, 2017 from $0.52 per gallon in the three months ended ~~September 30, 2016 from $0.55 per gallon in the three months ended September 30, 2015.~~March 31, 2016. Our effective cost per gallon is defined as the total costs associated with delivering natural gas, including gas commodity costs, transportation fees, liquefaction charges, and other site operating costs, plus the total cost of providing O&M services at stations that we do not own and for which we receive a per-gallon or fixed fee, including direct technician labor, indirect supervisor and management labor, repair parts and other direct maintenance costs, all divided by the total GGEs delivered less GGEs delivered by non-consolidated entities, such as entities that are accounted for under the equity ~~method investments.~~method. The ~~decrease~~increase in our effective cost per gallon was primarily due to ~~a decrease~~an increase in natural gas prices between periods. ~~The decrease in natural gas prices partially offset by the increase in gallons delivered resulted in a net decrease of $0.6 million in gas commodity costs between periods.~~

~~Gain from change in fair value of derivative warrants.~~ ~~These changes represent the non-cash impact with respect to valuing our outstanding liability-classified warrants based on mark-to-market accounting during the periods.~~

Selling, general and administrative. Selling, general and administrative expenses decreased by ~~$1.9~~$1.8 million to ~~$25.9~~$23.8 million in the three months ended ~~September 30, 2016,~~March 31, 2017, from ~~$27.8~~$25.6 million in the three months ended ~~September 30, 2015.~~March 31, 2016. This decrease was primarily driven by ~~a $0.4 million decrease in employee-related expenses, a $0.8 million decrease in travel and promotional expenses, and a $0.4 million decrease in bad debt expense.~~continued cost reduction efforts between periods.

Depreciation and amortization. Depreciation and amortization increased by ~~$0.8~~$0.3 million to ~~$14.8~~$15.3 million in the three months ended ~~September 30, 2016,~~March 31, 2017, from ~~$14.0~~$15.0 million in the three months ended ~~September 30, 2015,~~March 31, 2016, due to purchases of property and equipment, primarily consisting of equipment for our ~~stations.~~stations and additional CNG trailers purchased by NG Advantage.

~~Gain (loss) from extinguishment of debt, net.~~Interest expense. ~~Loss from extinguishment of debt, net was $(0.7)~~Interest expense decreased by $4.4 million to $4.9 million in the three months ended ~~September 30, 2016, primarily consisting of a $(0.9)~~March 31, 2017, from $9.3 million ~~loss as a result of repurchasing and retiring $85.0 million~~ in ~~principal amount of our SLG Notes, together with accrued interest thereon. See Note 10 for further information.~~

~~Interest expense, net.~~ ~~Interest expense, net, decreased by $3.9 million to $6.3 million for~~ the three months ended ~~September 30, 2016, from $10.2 million for the three months ended September 30, 2015.~~March 31, 2016. This decrease was primarily due to a reduction of outstanding indebtedness ~~under our 5.25% Notes and SLG Notes during the 2016 period. See Note 10 for further information.~~between periods.

Other income (expense), net. Other income (expense), net, decreased by ~~$(2.7)~~$(0.5) million to ~~$(0.1)~~$(0.2) million of expense ~~for~~in the three months ended ~~September 30, 2016,~~March 31, 2017, compared to ~~$2.6~~$0.3 million of income ~~for~~in the three months ended ~~September 30, 2015.~~March 31, 2016. This decrease was primarily due to ~~a decrease of $1.4 million between periods as result of a litigation settlement that occurred~~losses incurred from sales denominated in 2015 which resulted in a gain that was not repeated in 2016, and a decrease of $1.0 million due to $0.9 million in gains from asset disposals that occurred in 2015 compared to $(0.1) million in losses on asset disposals in 2016.foreign currencies.

Income tax benefit (expense). Income tax benefit (expense) ~~decreased~~increased by ~~$(0.6)~~$2.7 million to $2.3 million of tax benefit in the three months ended March 31, 2017, compared to $(0.4) million of tax expense ~~for~~in the three months ended ~~September 30, 2016, compared to $0.2 million of~~March 31, 2016. The increase in income tax benefit ~~for the three months ended September 30, 2015. The decrease~~ was primarily due to the deferred tax benefit attributable to ~~an increase in taxes on foreign operations between periods.~~the reduction of goodwill that arose from the Asset Sale.

Loss from noncontrolling interest. During the three months ended ~~September 30,~~March 31, 2016 and 2017, respectively, we recorded a ~~$0.4~~$0.3 million loss for the noncontrolling interest in the net loss of NG ~~Advantage, compared to a $0.1 million loss recorded in the three months ended September 30, 2015.~~Advantage. The noncontrolling interest in NG Advantage represents a 46.7% minority interest that was held by third parties during the applicable periods.

~~Nine Months Ended September 30, 2015 Compared to Nine Months Ended September 30, 2016~~

~~The table below presents our results of operations as a percentage of total revenue and the narrative that follows provides a detailed discussion of certain line items for the periods presented.~~

Nine Months Ended September 30,
2015 2016
Statement of Operations Data:

Revenue:

Product revenues 83.9 % 87.5 %
Service revenues 16.1
12.5

Total revenues 100.0
100.0

Operating expenses:

Cost of sales (exclusive of depreciation and amortization shown separately below):

Product cost of sales 65.7
56.8

Service cost of sales 8.0
6.3

Gain from change in fair value of derivative warrants (0.4 ) 0.0

Selling, general and administrative 32.8
25.5

Depreciation and amortization 15.2
14.9

Total operating expenses 121.3
103.5

Operating loss (21.3 ) (3.5 )
Gain (loss) from extinguishment of debt, net —
8.4

Interest expense, net (11.3 ) (7.7 )
Other income (expense), net 1.3
0.0

Loss from equity method investments (0.3 ) 0.0

Loss before income taxes (31.6 ) (2.8 )
Income tax benefit (expense) (0.5 ) (0.4 )
Net loss (32.1 ) (3.2 )
Loss from noncontrolling interest 0.3
0.4

Net loss attributable to Clean Energy Fuels Corp. (31.8 )% (2.8 )%

~~Revenue.~~ Revenue increased by $35.8 million to $300.8 million in the nine months ended September 30, 2016, from $265.0 million in the nine months ended September 30, 2015. This increase was primarily due to increased volumes, increased station construction sales and increased VETC revenues, partially offset by lower compressor sales.

Volume related revenues increased by $15.0 million between periods primarily due to an increase of 14.7 million gallons delivered, which provided approximately $12.7 million of increased revenue. This increase in gallons delivered was due to a 23.2 million gallon increase in CNG gallons delivered, which was primarily attributable to 27 new refuse customers, seven new transit customers and three new trucking customers. This increase was partially offset by a 5.4 million decrease in RNG gallons delivered for non-vehicle fuel and a 3.1 million decrease in LNG gallons delivered. Approximately $2.4 million of the increase in volume related revenues was the result of an increase in the effective price charged per gallon delivered. Our effective price per gallon charged was $0.86 for the 2016 period, a $0.01 per gallon increase from $0.85 per gallon charged for the 2015 period. The increase in our effective price was primarily due to increased RINs and LCFS credits sales which do not result in increased costs.

VETC revenues increased by $19.6 million between periods, as VETC was not in effect in the first nine months of 2015 because all VETC revenues for 2015 were recognized in December 2015 when Congress passed the Consolidated Appropriations Act that included an alternative fuel tax credit.

Station construction sales increased by $20.5 million between periods, principally from the sale of more full station projects than station upgrades in the 2016 period, as full station projections generally have substantially higher price points than station upgrades.

These revenue increases were partially offset by a decrease in Clean Energy Compression's revenue of $19.0 million between periods, which we believe is due to the effects of continued low global oil prices, the strength of the U.S. dollar, and slower than expected sales in China.

~~Cost of sales.~~ ~~Cost of sales decreased by $5.4 million to $189.8 million in the~~ ~~nine months ended September 30, 2016, from $195.2 million in the~~ ~~nine months ended September 30, 2015~~. The decrease was primarily due to a $18.7 million decrease in compressor costs between periods, due to decreased compressor sales and a $4.1 million decrease in gas commodity costs between periods as a result of a decrease in natural gas prices (discussed below). These decreases were partially offset by a $17.3 million increase in costs related to station construction sales primarily due to increased station construction sales between periods.

~~Our effective cost per gallon decreased by $0.06 per gallon, to $0.51 per gallon in the~~ ~~nine months ended September 30, 2016~~ ~~from $0.57 per gallon in the~~ ~~nine months ended September 30, 2015~~. The decrease in our effective cost per gallon was primarily due to a decrease in natural gas prices between periods. The decrease in natural gas prices partially offset by the increase in gallons delivered resulted in a net decrease of $4.1 million in gas commodity costs between periods.

Gain ~~from change in fair value of derivative warrants.~~ ~~These changes represent the non-cash impact with respect to valuing our outstanding liability-classified warrants based on mark-to-market accounting during the periods.~~

~~Selling, general and administrative.~~ Selling, general and administrative expenses decreased by $10.2 million to $76.8 million in the nine months ended September 30, 2016, from $87.0 million in the nine months ended September 30, 2015. This decrease was primarily driven by a $5.6 million decrease in employee-related expenses, a $3.2 million decrease in travel and promotional expenses due to company-wide cost cutting measures, and a $1.0 million decrease in bad debt expense.

~~Depreciation and amortization.~~ ~~Depreciation and amortization increased by $4.4 million to $44.7 million in the~~ ~~nine months ended September 30, 2016, from $40.3 million in the~~ ~~nine months ended September 30, 2015~~ ~~due to purchases made in prior periods of property and equipment, primarily for our stations.~~

~~Gain (loss)~~ from extinguishment of ~~debt, net.~~debt. Gain from extinguishment of debt ~~net was $25.4~~decreased by $12.7 million to $3.2 million in the ~~nine~~three months ended ~~September 30, 2016~~ ~~as a result of repurchasing and retiring $215.4~~March 31, 2017, from $15.9 million in principal amount of our 5.25% Notes and SLG Notes, together with $2.8 million accrued and unpaid interest thereon, for an aggregate purchase price of $125.6 million in cash and 20.3 million shares of our common stock. See Note 10 for further information.

~~Interest expense, net.~~ ~~Interest expense, net, decreased by $6.7 million to $23.3 million for~~ the ~~nine~~three months ended ~~September 30, 2016, from $30.0 million for the~~ ~~nine months ended September 30, 2015~~.March 31, 2016. This decrease was primarily due to our repurchases of a ~~reduction of outstanding indebtedness under our 5.25% Notes and SLG Notes in an aggregate~~lower principal amount of ~~$215.4 million during~~debt at higher prices in the 2017 period compared to the 2016 period. ~~See Note 10 for further information.~~

~~Other income (expense), net.~~Gain from sale of certain assets of subsidiary. ~~Other income (expense), net decreased by $(3.5) million to $(0.01) million of expense for the~~ ~~nine months ended September 30, 2016, compared to $3.5 million of income for the~~ ~~nine months ended September 30, 2015~~. This decrease was primarily due to a $(0.8) million increase in the loss from foreign currency transactions not in our subsidiaries’ functional currency, a decrease of $1.4 million between periods as result of a litigation settlement that occurred in 2015 which resulted in a gain that was not repeated in 2016 and a $1.3 million decrease due to $0.9 million in gain from assets disposals that occurred in 2015 compared to ($0.4) million in losses from disposal of assets in 2016.

~~Income tax expense. Income tax expense decreased by $0.2 million to $1.2 million for the~~ ~~nine months ended September 30, 2016, compared to $1.4 million for the~~ ~~nine months ended September 30, 2015. The decrease was primarily attributable to a decrease in taxes on foreign operations between periods.~~

~~Loss from noncontrolling interest.~~ ~~During the~~ ~~nine months ended September 30, 2016~~,In 2017, we recorded a ~~$1.3~~gain of $70.6 million ~~loss~~related to the Asset Sale (see "Recent Developments" and Note 2 to the condensed consolidated financial statements included in this report for ~~the noncontrolling interest in the net loss of NG Advantage, compared to a $0.8 million loss recorded in the~~ ~~nine months ended September 30, 2015~~additional information). ~~The noncontrolling interest in NG Advantage represents a 46.7% minority interest which that held by third parties during the applicable periods.~~

Seasonality and Inflation

To some extent, we experience seasonality in our results of operations. Natural gas vehicle fuel amounts consumed by some of our customers tend to be higher in summer months when buses and other fleet vehicles use more fuel to power their air conditioning systems. Natural gas commodity prices tend to be higher in the fall and winter months due to increased overall demand for natural gas for heating during these periods.

~~Since our inception,~~Historically, inflation has not significantly affected our operating results; however, costs for construction, repairs, maintenance, electricity and insurance are all subject to inflationary pressures, which could affect our ability to maintain our stations adequately, build new stations, expand our existing facilities or pursue additional ~~RNG production projects or~~facilities, and could materially increase our operating costs.

Liquidity and Capital Resources

We require cash to fund our capital expenditures, operating expenses and working capital requirements, including outlays for the design and construction of new fueling stations and additions or other modifications to existing fuel stations, debt repayments and repurchases, maintenance of LNG production facilities, purchases of new CNG tanker trailers, investment in RNG production, manufacturing natural gas fueling compressors and related equipment, mergers and acquisitions (if any), financing natural gas vehicles for our customers and general corporate purposes, including geographic expansion (domestically and internationally), pursuing new customer markets, supporting our sales and marketing activities, supporting legislative and regulatory initiatives and for working capital. Historically, our principal sources of liquidity have consisted of cash on hand, cash provided by our operations, including, if available, VETC and other credits, and cash provided by financing activities and sales of assets.

Liquidity

Liquidity is the ability to meet present and future financial obligations through operating cash flows, the sale or maturity of investments or the acquisition of additional funds through capital management. Our financial position and liquidity are, and will continue to be, influenced by a variety of factors, including the level of our outstanding indebtedness and the principal and interest we are obligated to pay on our indebtedness, our capital expenditure requirements and any merger, divestiture or acquisition activity, as well as our ability to generate cash flows from our operations. We expect cash provided by our operating activities to fluctuate as a result of a number of factors, including our operating results, and the timing and amount of our billing, collections and liability payments, completion of our station construction projects and receipt of government grants and tax and other fuel credits.

Cash Flows

Cash provided by operating activities was ~~$44.2~~$1.4 million in the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, compared to ~~$1.0~~$26.8 million ~~used in~~provided by operating activities in the ~~prior comparable~~2016 period. The ~~increase~~$25.4 million decrease in cash provided by operating activities was primarily ~~the result of $12.0 million~~due to a reduction in ~~VETC cash collected as well as improved operating results of approximately $40.7 million, exclusive of non-cash expenses and gains. Partially offsetting a portion of this improvement were~~ net ~~changes in~~ working capital of ~~$7.4~~$25.0 million, ~~principally~~resulting primarily from ~~increased receivables~~the timing of ~~RINs and LCFS Credits~~collections of receivables. Particularly, VETC revenue attributable to the full year of 2015 was collected in the ~~nine~~three months ended ~~September 30,~~March 31, 2016, compared to ~~the same period in 2015 as a result~~collection of ~~increased sales~~VETC revenue attributable to only one quarter (the fourth quarter of ~~those credits~~2016) in the ~~2016~~2017 period.

Cash provided by investing activities was ~~$9.5~~$43.2 million in the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, compared to ~~$32.6~~$21.8 million ~~used in~~provided by investing activities in the ~~prior comparable~~2016 period. The $21.4 million increase in cash provided by investing activities was primarily attributable to ~~decreased capital expenditures~~$29.0 million in cash received, net of ~~$23.6 million between periods, which~~cash transferred, in connection with the Asset Sale (see "Recent Developments" and Note 2 to the condensed consolidated financial statements included in this report for additional information). The increase was ~~largely due to decreased construction~~partially offset by an incremental use of ~~Company-owned stations. Additionally, cash provided by~~ our short-term investments ~~that matured, net~~for general corporate purposes of ~~purchases, increased by $17.9~~$4.3 million ~~between periods and cash provided as a return of capital from our equity method investment increased by $3.0 million between periods.~~in 2017 compared to the same period in the prior year.

Cash used in financing activities in the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 was ~~$57.2~~$33.7 million, compared to ~~$4.3~~$6.2 million used in financing activities in the ~~prior comparable~~2016 period. The $27.5 million increase in cash used in financing activities was primarily due to ~~a $122.8~~our repayment of $23.5 million ~~increase~~under the Credit Facility with PlainsCapital Bank ("Plains") in ~~scheduled debt payments~~the 2017 period and ~~repayments of long term debt prior to maturity. Partially offsetting this increase in cash used in financing activities was a $68.3~~an $11.3 million ~~increase~~decrease in cash provided by financing activities as a result of ~~our~~lower sales of our common stock through the ATM ~~program~~Program (as defined and discussed below). Partially offsetting the increase in cash used in financing activities was a $6.0 million increase between periods in proceeds provided by debt instruments related to borrowings by NG Advantage for CNG trailers and equipment.

Capital Expenditures and Other Uses of Cash

We require cash to fund our capital expenditures, operating expenses and working capital requirements, including costs associated with fuel sales, outlays for the design and construction of new fueling stations, additions or other modifications to existing fuel stations, debt repayments and repurchases, purchases of new CNG tanker trailers, maintenance of LNG production facilities, manufacturing natural gas fueling compressors and other equipment, mergers and acquisitions (if any), financing natural gas vehicles for our customers and general corporate purposes, including geographic expansion (domestically and internationally), pursuing new customer markets and supporting our sales and marketing activities, including supporting legislative and regulatory initiatives.

Our business plan calls for approximately ~~$25.5~~$29.0 million in capital expenditures for all of ~~2016,~~2017, primarily related to the construction of CNG and LNG fueling stations, ~~and~~additional investments in ANGH stations to add CNG fueling, the purchase of additional CNG trailers and equipment by NG Advantage, and ~~to a lesser extent,~~ LNG plant maintenance ~~costs and RNG plant construction and maintenance~~ costs.

We had total indebtedness of approximately ~~$355.5~~$256.7 million in principal amount as of ~~September 30, 2016,~~March 31, 2017, of which approximately ~~$1.0~~$3.2 million, ~~$4.8~~$139.3 million, ~~$234.5~~$53.5 million, ~~$54.7~~$53.4 million, ~~$53.8~~$2.9 million and ~~$6.7~~$4.4 million is expected to become due in ~~2016,~~ 2017, 2018, 2019, 2020, 2021 and thereafter, respectively. Additionally, we expect our total interest payment obligations relating to our indebtedness to be approximately ~~$29.5~~$17.2 million in ~~2016, $21.6~~2017, $3.4 million of which ~~has~~had been paid when due as of ~~September 30, 2016. Although we do not have a specific plan regarding the repurchase, redemption or restructuring of our outstanding indebtedness, we~~March 31, 2017. We generally intend to make payments under our various debt instruments when due and pursue opportunities for earlier repayment and/or refinancing if and when these opportunities arise. With respect to our 5.25% Notes, our board of directors has authorized and approved the use of up to $50.0 million to opportunistically purchase outstanding 5.25% Notes in the open market and at the date of this report we have used an aggregate $24.9 million for such purchases.

We may also elect to invest additional amounts in companies, assets or joint ventures in the natural gas fueling infrastructure, vehicle or services industries ~~including RNG production,~~ or use capital for other activities or ~~pursuits.~~pursuits, including those described above.

Sources of Cash

Historically, our principal sources of liquidity have consisted of cash on hand, cash provided by our operations, including, if available, grants, VETC and other credits, and cash provided by financing activities and sales of assets. ~~At September 30, 2016,~~As of March 31, 2017, we had total cash and cash equivalents and short-term investments of ~~$118.9~~$97.9 million, compared to ~~$146.7~~$109.8 million at December 31, ~~2015.~~ 2016.

We expect cash provided by our operating activities to fluctuate depending on our operating results, which can be affected by natural gas prices and sale activity, fluctuations in commodity costs and the amount and timing of recognition of government credits, sales of RINs and LCFS Credits, compressor and other equipment sales, station construction sales and our billing, collections and liability payments, among other factors. See "Risk Factors" in Part II, Item 1A of this report for further information.

On November 11, 2015, we entered into an equity distribution agreement with Citigroup Global Markets Inc. ("Citigroup"), as sales agent and/or principal, ~~pursuant~~ to ~~which~~commence an "at-the-market" offering program (the "ATM Program"). Initially we ~~may~~were permitted to issue and sell, from time to time, through or to Citigroup, shares of our common stock having an aggregate offering price of up to $75.0 million in ~~an “at-the-market” offering program (the “ATM Program”).~~the ATM Program. On September 9, 2016 and December 21, 2016, we entered into an amended and restated equity distribution agreement with Citigroup, which amends, restates, and replaces the original equity distribution agreement in its entirety, for the primary purpose of increasing from $75.0 million to $110.0 million,have increased the aggregate offering price of shares of our common stock available for issuance and sale in the ATM ~~Program.~~

~~This table summarizes the activity under the ATM~~ Program, ~~for the following periods:~~

Three Months Ended September 30, Nine Months Ended September 30, Through November 3,
(in millions) 2016 2016 2016
Gross proceeds $ 16.1
$ 69.1
$ 83.1

Fees and issuance costs 0.4
1.7
2.4

Net proceeds $ 15.7
$ 67.4
$ 80.7

Shares issued 3.8
21.3
24.5

first to $110.0 million and subsequently to $200.0 million. As of the date of this report, shares of our common stock having an approximate ~~value~~offering price of ~~$26.9~~approximately $78.7 million remain available for sale ~~through~~in the ATM Program. We continue to use any net proceeds from the ATM Program for general corporate purposes, including retiring ~~a portion~~certain of our ~~outstanding~~ indebtedness.

The following table summarizes the activity under the ATM Program for periods presented:



	Three Months Ended March 31,		Three Months Ended March 31,		Inception through May 4,
(in millions)	2016		2017		2017
Gross proceeds	$	22.1	$	10.8	$	121.3
Fees and issuance costs	0.7		0.3		3.4
Net proceeds	$	21.4	$	10.5	$	117.9
Shares issued	7.7		3.8		36.4

On February 29, 2016, we entered into ~~the Credit Facility~~a loan and security agreement with, and issued a related promissory note to Plains, pursuant to which Plains agreed to lend us up to $50.0 million on a revolving basis for a term of one ~~year.~~year (the "Credit Facility"). Simultaneously, we drew ~~down~~ $50.0 million under the Credit Facility, which we repaid in full on August 31, ~~2016. As a result, no amounts were outstanding under the Credit Facility as of September 30,~~ 2016. On October 31, 2016, the Credit Facility's maturity date was extended from February 28, 2017 to September 30, 2018. On December 22, 2016, we drew $23.5 million under the Credit Facility, which we repaid in full on March 31, 2017.

See Note 1012 to the condensed consolidated financial statements included in this report for additional information about our outstanding debt.

On March 31, 2017, Renewables completed the Asset Sale. The net proceeds to us from the Asset Sale were approximately $143.2 million. See “Recent Developments” and Note 2 to the condensed consolidated financial statements included in this report for additional information.

We believe ~~that~~ our current cash and cash equivalents and short-term investments and cash provided by our operating and financing activities will satisfy our routine business requirements for at least the next 12 ~~months;~~months from the date of this report; however, we ~~will~~would need to raise additional capital to fund any capital expenditures, investments or debt repayments that we cannot fund through available cash, or cash provided by our operations or ~~that we cannot fund through~~ other sources, such as with our common stock.

The timing and necessity of any future capital raise would depend on various factors, including our rate of new station construction, debt repayments (either prior to or at maturity), any potential merger or acquisition activity and the other factors that influence our liquidity, as described under ~~“—Liquidity”~~“Performance Overview” above.

We may seek to raise additional capital through one or more sources, including, among others, selling assets, obtaining new or restructuring existing debt, obtaining equity capital (including through the ATM Program or other equity offerings), or any combination of these or other ~~available~~potential sources of capital. We may not be able to raise capital when needed, on terms that are favorable to us or our stockholders or at all. Any inability to raise necessary capital may impair our ability to build new stations, develop natural gas fueling infrastructure, invest in strategic transactions or acquisitions or repay our outstanding indebtedness and may reduce our ability to build our business and generate sustained or increased ~~revenues.~~revenue.

Off-Balance Sheet Arrangements

~~At September 30, 2016,~~As of March 31, 2017, we had the following off-balance sheet arrangements that had, or are reasonably likely to have, a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources:

Outstanding surety bonds for construction contracts and general corporate purposes totaling ~~$59.1 million ;~~$62.7 million;

Two long-term take-or-pay contracts for the purchase of natural gas; and

Operating leases where we are the lessee.

We provide surety bonds primarily for construction contracts in the ordinary course of our business, as a form of guarantee. No liability has been recorded in connection with our surety bonds as we do not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid under these arrangements for which we will not be reimbursed.

We have two long-term take-or-pay contracts that require us to purchase minimum volumes of natural ~~gas. These contracts~~gas at index based prices which expire in March 2020 and December ~~2020.~~2020, respectively.

We have entered into operating lease arrangements for certain equipment and for our office and field operating locations in the ordinary course of our business. The terms of our leases expire at various dates through ~~2021.~~2038. Additionally, in November 2006, we entered into a ground lease for 36 acres in California on which we built our California LNG liquefaction plant. The lease is for an initial term of 30 years and requires payments of $0.2 million per year, plus up to $0.1 million per year for each 30 million gallons of production capacity utilized, subject to ~~future~~ adjustment based on consumer price index changes. We must also pay a royalty to the landlord for each gallon of LNG produced at the facility, as well as a fee for certain other services that the landlord provides.

Item 3.—Quantitative and Qualitative Disclosures about Market Risk

In the ordinary course of our business, we are exposed to various market risks, including commodity price risks and risks related to foreign currency exchange rates.

Commodity Price Risk

We are subject to market risk with respect to our sales of natural gas, which have historically been subject to volatile market conditions. Our exposure to market risk is heightened when we have a fixed-price sales contract with a customer that is not covered by a futures contract, or when we are otherwise unable to pass through natural gas price increases to customers. Natural gas prices and availability are affected by many factors, including, among others, drilling activity, supply, weather conditions, overall economic conditions and foreign and domestic government regulations.

Natural gas costs represented ~~$75.7~~$72.8 million of our cost of sales in ~~2015~~2016 and ~~$52.5~~$23.3 million of our cost of sales for the ~~nine~~three months ended ~~September 30, 2016.~~March 31, 2017.

To reduce price risk caused by market fluctuations in natural gas, we may enter into exchange traded natural gas futures contracts. These arrangements expose us to the risk of financial loss in situations where the other party to the contract defaults on the contract or there is a change in the expected differential between the underlying price in the contract and the actual price of natural gas we pay at the delivery point. We did not have any natural gas futures contracts outstanding at ~~September 30, 2016.~~March 31, 2017.

Foreign Currency Exchange Rate Risk

Because we have foreign operations, we are exposed to foreign currency exchange gains and losses. Since the functional currency of our foreign subsidiaries is in their local currency, the currency effects of translating the financial statements of those foreign subsidiaries, which operate in local currency environments, are included in the accumulated other comprehensive income ~~(loss)~~ component of consolidated equity in our ~~condensed~~ consolidated financial statements and do not impact earnings. ~~However, foreign~~Foreign currency transaction gains and losses not in our subsidiaries’ functional currency, however, do impact earnings and resulted in approximately ~~$0.2~~$0.4 million of ~~gains~~losses in the ~~nine~~three months ended ~~September 30, 2016. During the nine months ended September 30, 2016,~~March 31, 2017. In this period, our primary exposure to foreign currency exchange rates related to our Canadian operations that had certain outstanding accounts receivable and accounts payable denominated in the U.S. dollar, which were not hedged.

We have prepared a sensitivity analysis to estimate our exposure to market risk with respect to our monetary transactions denominated in a foreign currency. If the exchange rates on these assets and liabilities were to fluctuate by 10% from the rates as of ~~September 30, 2016,~~March 31, 2017, we would expect a corresponding fluctuation in the value of the assets and liabilities of approximately ~~$1.6~~$1.4 million.

Item 4.—Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the ~~Securities~~ Exchange Act ~~of 1934, as amended (the “Exchange Act”),~~ is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of our disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Our management carried out an evaluation, under the supervision of and with the participation of our Chief Executive Officer and Chief Financial Officer (our principal executive and principal financial officers, respectively), of the effectiveness of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

We regularly review and evaluate our internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.—OTHER INFORMATION

Item 1. —Legal Proceedings

We are or may become party, and our property may become subject, to various legal actions ~~that have arisen~~ in the ordinary course of our business. ~~During the course of our operations, we~~We are also subject to audit by tax authorities for varying periods in various federal, state, local, and foreign tax ~~jurisdictions. Disputes~~jurisdictions, and disputes have arisen, and may continue to arise, during the course of ~~such audits as to facts and matters of law.~~these audits. It is impossible to determine the ~~ultimate~~ liabilities that we may incur resulting from any of these lawsuits ~~claims~~ and proceedings, audits, commitments, contingencies and related matters or the timing of these liabilities, if any. If these matters were to ultimately be resolved unfavorably ~~an outcome not currently anticipated,~~ it is possible that such an outcome could have a material adverse effect upon our consolidated financial position, results of operations, or liquidity. ~~However,~~We do not, however, anticipate such an outcome and we believe ~~that~~ the ultimate resolution of ~~such~~these matters will not have a material adverse effect on our consolidated financial position, results of operations, or liquidity.

Item 1A.—Risk Factors

An investment in our Company involves a high degree of risk of loss. You should carefully consider the risk factors discussed below and all of the other information included in this report and our ~~2015~~2016 Form 10-K before you make any investment decision regarding our securities. We believe the risks and uncertainties described below are the most significant we face. The occurrence of any of the following risks could harm our business, financial condition, results of operations, prospects and reputation and could cause the trading price of our common stock to decline. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business.

We have a history of losses and may incur additional losses in the future.

For the years ended December 31, ~~2013,~~ 2014, ~~and~~ 2015 and ~~the nine months ended September 30,~~ 2016, we incurred pre-tax losses of ~~$63.2 million, $89.9~~$89.8 million, $133.8 million, and ~~$8.4~~$12.4 million respectively. During these periods our losses were substantially decreased by approximately ~~$45.4 million,~~ $28.4 million, $31.0 million, and ~~$19.6~~$26.6 million of revenue, respectively, from a federal alternative fuels tax credit ("VETC")., which ceased to be available as of January 1, 2017 and may not be available for any subsequent period. We may continue to incur losses, orthe amount of our losses may increase, and we may never ~~achieve or~~ maintain profitability, which would adversely affect our business, prospects and financial condition, and may cause the price of our common stock to fall.

~~Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our debt.~~

At September 30, 2016, our total indebtedness was approximately $355.5 million in principal amount, which includes amounts owed under the 7.5% Notes, 5.25% Notes and Canton Bonds, each of which is defined and discussed in Note 10 to our condensed consolidated financial statements included in this report. As of September 30, 2016, approximately $1.0 million, $4.8 million, $234.5 million, $54.7 million, $53.8 million, and $6.7 million of the principal amount of our indebtedness matures in 2016, 2017, 2018, 2019, 2020, and thereafter, respectively. Additionally, we expect our total interest payment obligations relating to our indebtedness to be approximately $29.5 million in 2016, $21.6 million of which was paid when due as of September 30, 2016.

Although we do not have a specific plan regarding the repurchase, redemption or restructuring of our outstanding indebtedness, we generally intend to make payments under our various debt instruments when due and pursue opportunities for earlier repayment and/or refinancing if and when opportunities arise. With respect to certain of our outstanding indebtedness due in 2018, our board of directors has authorized and approved the use of up to $50.0 million to opportunistically purchase outstanding 5.25% Notes in the open market, in accordance with the terms of the indenture governing the 5.25% Notes and at the date of this report we have used an aggregate $24.9 million for such purchases.

Our ability to make payments of the principal and interest on our indebtedness, whether at or prior to their due dates, depends on our future performance, which is subject to economic, financial, competitive and other factors, including those described in these risk factors, many of which are beyond our control. Our business may not generate cash flow from operations sufficient to service our debt.

If we are, or if we expect that we will be, unable to generate such cash flow, we may be required to pursue one or more alternatives, such as selling assets, restructuring or refinancing our debt or obtaining additional equity capital or debt financing on terms that may be onerous or highly dilutive to our stockholders. Our ability to implement any of these alternatives, should we decide to do so, would depend on the capital markets and our financial condition at the time. We may not be able to engage in any of these activities or engage in these activities on desirable terms or at a desirable time, which could result in a default on our debt obligations.

Additionally, certain of the agreements governing our indebtedness contain restrictive covenants and any failure by us to comply with any of these covenants could also cause us to be in default under the agreements governing the indebtedness. In the event of any such default, the holders of the indebtedness could, among other things, elect to declare all amounts owed immediately due and payable, which could cause all or a large portion of our available cash flow to be used to pay such amounts and thereby reduce the amount of cash available to pursue our business plans or force us into bankruptcy or liquidation, or, with respect to our indebtedness that is secured, elect to foreclose on the assets that secure the debt, which would force us to relinquish rights to assets that we may believe are critical to our business. In addition, the substantial amount of our indebtedness, combined with our other financial obligations and contractual commitments, could have other important consequences. For example, it could make us more vulnerable to adverse changes in general U.S. and worldwide economic, industry and competitive conditions and government regulations, limit our flexibility to plan for, or react to, changes in our business and industry, place us at a disadvantage compared to our competitors who have less debt or limit our ability to borrow additional amounts as needed.

At the date of this report, we are permitted to repay up to $150.0 million of our outstanding indebtedness at maturity with shares of our common stock rather than cash, with the amount of shares determined by the then-current trading price of our common stock. Any such issuance would increase the number of our outstanding shares and would dilute the ownership interest of our stockholders.

~~We may need to raise additional capital to continue to fund the growth of our business or repay our debt.~~

At September 30, 2016, we had total cash and cash equivalents of $41.6 million and short-term investments of $77.3 million. Our business plan calls for approximately $25.5 million in capital expenditures for all of 2016, as well as additional capital expenditures thereafter. We may also require capital to make principal or interest payments on our indebtedness, either prior to or at their maturity dates, or for unanticipated expenses, mergers and acquisitions and strategic investments. As a result, we may find it necessary to raise additional capital through selling assets or pursuing debt or equity financing.

Asset sales and equity or debt financing options may not be available when needed on terms favorable to us, or at all. Any sale of our assets may limit our operational capacity and could limit or eliminate any business plans that are dependent on the sold assets. Additional issuances of our common stock or securities convertible into our common stock (including through our established at-the-market offering program or other equity offerings) would increase the number of our outstanding shares and dilute the ownership interest of our stockholders. We may also pursue debt financing since, despite the high level of our indebtedness, the agreements governing much of our existing indebtedness do not restrict our ability to incur additional debt, including secured and unsecured debt, or require us to maintain financial ratios or specified levels of net worth or liquidity. Debt financing options that we may pursue include, among others, equipment financing, sales of convertible notes, high-yield debt, asset-based loans, term loans, project finance debt, municipal bond financing, loans secured by receivables or inventory or commercial bank financing. Any debt financing we obtain may require us to make significant interest payments and to pledge some or all of our assets as security. In addition, higher levels of indebtedness could increase our risk of non-repayment and could adversely affect our creditworthiness, which could limit our ability to obtain further debt or equity financing as needed and restrict our flexibility in responding to changing business, industry and economic conditions. Further, we may incur substantial costs in pursuing any future capital-raising transactions, including investment banking, legal and accounting fees, printing and distribution expenses and other similar costs. On the other hand, if we are unable to obtain capital in amounts sufficient to fund our contractual obligations, business plans, unanticipated expenses, capital expenditures, mergers, acquisitions or strategic investments, we would be forced to suspend, delay or curtail these plans, expenditures or other transactions, which could negatively affect our business and prospects.

Our success is dependent upon the willingness of fleets and other consumers to adopt natural gas as a vehicle ~~fuel.~~fuel, which may not occur in a timely manner, at expected levels or at all.

Our success is highly dependent upon the adoption by fleets and other consumers of natural gas as a vehicle fuel. If the market for natural gas as a vehicle fuel does not develop at the level or as ~~we expect or develops more slowly than~~quickly as we expect or if a market does develop but we are not able to capture a significant share of the market or the market subsequently declines, our business, prospects, financial condition and operating results would be harmed.

The market for natural gas as a vehicle fuel is a relatively new and developing market characterized by intense competition, evolving government regulation and industry standards and changing consumer demands and behaviors.

Factors that may influence the adoption of natural gas as a vehicle fuel include, among others:

Increases, decreases or volatility in the prices of oil, gasoline, diesel, natural gas and ~~natural gas;~~other vehicle fuels;

The availability ~~and price~~ of natural gas compared to gasoline, diesel and other vehicle fuels;

Natural gas vehicle cost, availability (including for heavy, medium and light-duty applications), quality, safety, design and performance, all relative to comparable vehicles powered by other ~~vehicles;~~fuels;

The existence of government programs, policies, regulations or incentives that promote natural gas, including tax credits, grants, renewable fuel standards and low carbon fuel standards;

The availability or perceived availability, consumer acceptance and favor of lawmakers, regulators, other policymakers, environmental organizations or other powerful groups for non-natural gas fuels and vehicles, including growing favor for electric and/or hydrogen-powered vehicles;

Improvements in the efficiency, fuel economy or greenhouse gas emissions of engines for ~~gasoline and diesel-powered and alternative vehicles;~~vehicles powered by other fuels;

~~The entry or exit of engine manufacturers into or from the market;~~

Perceptions about greenhouse gas emissions from natural gas production and transportation methods, ~~natural gas~~ fueling stations and ~~natural~~ gas ~~vehicles;~~

~~The availability~~vehicles, and ~~acceptance~~the environmental consciousness of ~~other alternative fuels~~fleets and ~~alternative vehicles;~~

~~The existence of government programs, policies, regulations or incentives, including tax credits, promoting natural gas and other alternative fuels and alternative vehicles;~~consumers;

Access to natural gas fueling stations and the convenience and cost to fuel aand service natural gas ~~vehicle;~~

~~The availability of service for natural gas~~ vehicles;

~~The environmental consciousness of fleets and consumers;~~ and

The other risks discussed in these risk factors.

Increases, decreases and general volatility in oil, gasoline, diesel and natural gas prices could adversely ~~impact~~affect our business.

~~In recent years, the prices of oil, gasoline, diesel and natural gas have been volatile, and this volatility may continue. Additionally, prices~~Prices for crude oil, the commodity used to make gasoline and diesel, today's most prevalent and conventional vehicle fuels, have been low in recent years, ~~have been low,~~ due in part to over-production and increased supply without a corresponding increase in demand. Market adoption of compressed natural gas ("CNG"), liquefied natural gas ("LNG") and renewable natural gas ("RNG") (RNG can be delivered in the form of CNG or LNG) as vehicle fuels could be slowed or limited if the over-supply and resulting low prices ~~and over-supply~~ of crude oil gasoline and diesel ~~today’s most prevalent and conventional vehicle fuels,~~ continue or ~~worsen. The market for natural gas as a vehicle fuel could also suffer~~worsen, or if ~~there are further decreases in the prices of gasoline and diesel without an equal and corresponding decrease in~~ the price of natural gas ~~or if there is an increase in the price of natural gas~~increases without equal and corresponding increases in the prices of crude oil, gasoline and diesel. Any of these circumstances could decrease the market's perception of a need for alternative vehicle fuels generally and could cause the success or perceived success of our industry and our business to materially suffer. ~~Part of~~In addition, low gasoline and diesel prices contribute to the ~~reason that these circumstances could slow or limit adoption of natural gas as a vehicle fuel is~~differential between the ~~higher~~ cost of natural gas vehicles ~~compared to~~and gasoline or diesel-powered vehicles. Generally, natural gas vehicles cost more initially than gasoline or diesel-powered vehicles, as the components needed for a vehicle to use natural gas add to athe vehicle’s base cost. If gasoline or diesel prices drop significantly, fuel economy of gasoline- or diesel-powered vehicles improves, or the prices of CNG and LNG are not sufficiently low, operators may delay or refrain from purchasing natural gas vehicles or decide notOperators seek to ~~convert their existing vehicles to run on natural gas because of a perceived inability to~~ recover ~~in a timely manner~~ the additional costs of acquiring or converting to natural gas ~~vehicles. In addition, in order to attract fleet operators and other consumers to convert to~~vehicles over time through the lower costs of fueling natural gas ~~vehicles,~~vehicles; however, operators may perceive an inability to timely recover these additional costs if we ~~must be able to~~do not offer CNG and LNG fuel at prices sufficiently lower than gasoline and diesel. ~~Decreases in the price of gasoline and diesel and increases in the price of natural gas make it more difficult for us~~Our ability to offer our customers an attractive pricing advantage for CNG and LNG ~~as compared to gasoline and diesel prices~~ and maintain an acceptable margin on our ~~sales. Further, increased~~sales becomes more difficult if prices of gasoline and diesel decrease or if prices of natural gas increase. These pricing conditions exacerbate the cost differential between natural gas vehicles and gasoline or diesel- powered vehicles, which may lead operators to delay or refrain from purchasing or converting to natural gas vehicles. Any of these outcomes would decrease our potential customer base and harm our business prospects.

Additionally, the price of natural gas, as well as the prices of oil, gasoline and diesel, has been volatile in recent years, and this volatility may continue. Fluctuations in natural gas prices affect the cost to us of the natural gas ~~and~~commodity. High natural gas prices adversely impact our operating margins in cases where we cannot pass the increased costs through to our ~~customers, and conversely,~~customers. Conversely, lower natural gas prices reduce our ~~revenues~~revenue in cases where the commodity cost is passed through to our customers. As a result, these fluctuations in natural gas prices can have a significant and adverse impact on our operating results.

~~Among the factors~~

Factors that can cause fluctuations in gasoline, diesel and natural gas prices ~~are~~include, among others, changes in supply and availability of crude oil and natural gas, government regulations and political conditions, inventory levels, ~~level of~~ consumer demand, price and availability of alternative fuels, weather conditions, negative publicity ~~surrounding natural gas~~about drilling, production or importing techniques and methods for crude oil or ~~oil production and importing,~~natural gas, economic conditions and the price of foreign ~~imports, government regulations and political conditions.~~ imports.

With respect to natural gas supply and use as a vehicle fuel, there have been efforts in recent ~~efforts~~years to place new regulatory requirements on the production of natural gas by hydraulic fracturing of shale gas reservoirs and other means and on transporting, dispensing and using natural gas.

Hydraulic fracturing and horizontal drilling techniques have resulted in a substantial increase in the proven natural gas reserves in the United ~~States and any~~States. Any changes in regulations that make it more expensive or unprofitable to produce natural gas through these techniques or others, as well as any changes to the regulations relating to transporting, dispensing or using natural gas, could lead to increased natural gas prices.

If ~~the current~~these pricing conditions continue or worsen, or if all or some combination of these factors ~~causing~~cause continued or further volatility ~~or decreases~~ in natural gas, oil and diesel prices, ~~were to occur,~~ our business and our industry would be materially harmed.

Vehicle and engine manufacturers produce very few natural gas vehicles and engines in our key markets, which limits our customer base and our sales of CNG, LNG and RNG.

~~If trucks using~~Original equipment manufacturers produce a relatively small number of natural gas engines and vehicles, including heavy-duty trucks, medium duty applications and other types of vehicles, in the U.S. and Canadian markets. Further, these manufacturers may not decide to expand, or they may decide to discontinue or curtail, their natural gas engine or vehicle product lines. The limited production of natural gas engines and vehicles increases the cost to purchase these vehicles and limits their availability, which restricts their large-scale introduction and adoption. As a result of these and other factors, the limited supply of natural gas vehicles could reduce our potential customer base and natural gas fuel sales, which could harm our business and prospects.

If there are advances or improvements in non-natural gas vehicle fuels or engines powered by these fuels, demand for natural gas vehicles may decline.

Technological advances in the production, delivery and use of gasoline, diesel or other alternative vehicle fuels that are, or are perceived to be, cleaner, more cost-effective, more readily available or otherwise more attractive than CNG, LNG or RNG may slow or limit adoption of natural gas vehicles. For example, advances in gasoline and diesel engine technology, including efficiency improvements and further development of hybrid engines, may offer a cleaner, more cost-effective option and reduce the likelihood that fleet customers will convert their vehicles to natural gas. Additionally, technological advances related to ethanol or biodiesel, which are used as an additive to, or substitute for gasoline and diesel fuel, may negatively influence the market's perception of the need to diversify fuels and, as a result, affect the growth of the natural gas vehicle fuel market.

Further, use of electric heavy-duty trucks, buses and refuse trucks, or the perception that such vehicles may soon be widely available and provide satisfactory performance at an acceptable cost, may reduce demand for natural gas vehicles in these applications. In addition, renewable diesel, hydrogen and other alternative fuels may prove to be cleaner, more cost-effective alternatives to gasoline and diesel than natural gas. Advances in technology that reduce demand for natural gas as a vehicle fuel or the failure of natural gas vehicle technology to advance at an equal pace could slow or curtail the growth of natural gas vehicle purchases or conversions, which would have an adverse effect on our business.

Our business is influenced by environmental, tax and other government regulations, programs and incentives that promote cleaner fuels and alternative vehicles, and their adoption, modification or repeal could negatively impact our business.

Our business is influenced by federal, state and local government tax credits, rebates, grants and similar programs and incentives that promote the use of CNG, LNG and RNG as a vehicle fuel, including the VETC, which expired on December 31, 2016 and may not ~~adopted~~be available in any subsequent period, and various government programs that make available grant funds for the purchase and construction of natural gas vehicles and fueling stations. Additionally, our business is influenced by laws, rules and regulations that require reductions in carbon emissions and/or the use of renewable fuels, such as the California and Oregon Low Carbon Fuel Standards and the federal Renewable Fuel Standard Phase 2, under which we generate credits ("LCFS Credits" and "RIN Credits" or "RINs," respectively) by selling CNG, LNG and RNG as a vehicle fuel.

These programs and regulations, which have the effect of encouraging the use of CNG, LNG or RNG as a vehicle fuel could expire or be repealed or amended for a variety of reasons. For example, parties with an interest in gasoline and diesel or other alternative vehicle fuels, such as electricity, hydrogen, renewable diesel, biodiesel or ethanol, many of whom have substantially greater resources and influence than we have, invest significant time and money in efforts to delay, repeal or otherwise negatively influence regulations and programs that promote natural gas as a vehicle fuel. Further, changes in federal, state or local political, social or economic conditions could result in the modification or repeal of these programs or regulations. Any failure to adopt, delay in implementing, expiration, repeal or modification of these programs and regulations, or the adoption of any such programs and regulations that encourage the use of other alternative fuels or alternative vehicles over natural gas, could harm our operating results and financial condition.

We face increasing competition from a variety of businesses, many of which have far greater resources, customer bases, and brand awareness than we have, and we may not be able to compete effectively with these businesses.

The market for vehicle fuels is highly competitive. The biggest competition for CNG and LNG use as a vehicle fuel is gasoline and diesel, as the vast majority of vehicles in the United States and Canada are powered by these fuels. We also compete with suppliers of other alternative vehicle fuels, including renewable diesel, biodiesel and ethanol, as well as producers and fuelers of alternative vehicles, including hybrid, electric and hydrogen-powered vehicles. Additionally, our stations compete directly with other natural gas fueling stations and indirectly with electric vehicle charging stations and fueling stations for other alternative vehicle fuels. Further, for certain of our key customer markets, such as airports, we indirectly compete with companies such as Uber and Lyft that provide alternative transportation methods. We also face high levels of competition with respect to our other business activities, including our manufacture and sale of natural gas fueling compressors and other equipment, our procurement and sale of RNG and our sale of CNG and LNG to industrial and institutional energy users or for other non-vehicle purposes.

A significant number of established businesses, including oil and gas companies, alternative vehicle and alternative fuel companies, refuse collectors, utilities and their affiliates, industrial gas companies, truck ~~operators~~stop and fuel station owners, fuel providers and other organizations have entered or may enter the market for natural gas and other alternatives for use as a vehicle fuel. Many of these competitors have longer operating histories, larger customer bases, greater brand recognition and market penetration and substantially greater financial, marketing, research and other resources than we have. As a result, they may be able to respond more quickly to changes in customer preferences or legal requirements, devote greater resources to the ~~extent~~development, promotion and sale of their products, adopt more aggressive pricing policies, devote substantially more resources to infrastructure and systems development or exert more influence on the regulatory landscape that impacts the vehicle fuels market. Additionally, utilities and their affiliates typically have additional and unique competitive advantages, including a lower cost of capital, substantial and

predictable cash flows, long-standing customer relationships, greater brand awareness and large and well-trained sales and marketing organizations. We may not be able to compete effectively against these organizations.

We expect competition to increase in the alternative vehicle fuels market generally and, if the demand for natural gas vehicle fuel increases, in the market for natural gas vehicle fuel. Any such increased competition may reduce our customer base and revenue and may lead to pricing pressure, reduced operating margins and fewer expansion opportunities.

Servicing our debt requires a significant amount of cash, and we ~~anticipate,~~may not have sufficient cash flow from our ~~results~~business to pay our debt.

As of March 31, 2017, our total indebtedness was approximately $256.7 million in principal amount, which includes amounts owed under the 7.5% Notes, 5.25% Notes and Plains Note, each of which is defined and discussed in Note 12 to our condensed consolidated financial statements included in this report. As of March 31, 2017, approximately $3.2 million, $139.3 million, $53.5 million, $53.4 million, $2.9 million and $4.4 million of the principal amount of our indebtedness matures in 2017, 2018, 2019, 2020, 2021, and thereafter, respectively. We expect our total interest payment obligations relating to our indebtedness to be approximately $17.2 million in 2017, $3.4 million of which had been paid when due as of March 31, 2017.

We generally intend to make payments under our various debt instruments when due and pursue opportunities for earlier repayment and/or refinancing if and when these opportunities arise.

In that case, we may be required to pursue one or more alternatives to meet our debt obligations. For instance, as of the date of this report, we are permitted to repay up to $125.0 million of our outstanding indebtedness at maturity with shares of our common stock rather than cash, with the amount of shares determined by the then-current trading price of our common stock. Any repayment of our debt with equity would increase the number of our outstanding shares and may significantly dilute the ownership interest of our stockholders. Additionally, any shortfall of cash from operations to service our debt may lead us to seek capital from other sources, such as selling assets, restructuring or refinancing our debt or obtaining additional equity capital or debt financing. Our ability to engage in any of these activities, should we decide to do so, would depend on the capital markets, the state of our industry and our business and our financial condition at the time, and we may not be successful in obtaining additional capital on desirable terms, at a desirable time or at all. Any failure to make payments on our debt when due, either in cash or stock, could result in a default on our debt obligations.

Additionally, certain of the agreements governing our indebtedness contain restrictive covenants, and any failure by us to comply with any of these covenants could also cause us to be in default under the agreements governing the indebtedness. In the event of any default on our debt obligations, the holders of the indebtedness could, among other things, elect to declare all amounts owed immediately due and payable, which could cause all or a large portion of our available cash flow to be used to pay such amounts and thereby reduce the amount of cash available to pursue our business plans or force us into bankruptcy or liquidation. In addition, the substantial amount of our indebtedness, combined with our other financial obligations and contractual commitments, could have other important consequences. For example, it could make us more vulnerable to adverse changes in general U.S. and worldwide economic, industry and competitive conditions and government regulations, limit our flexibility to plan for, or react to, changes in our business and industry, place us at a disadvantage compared to our competitors who have less debt or limit our ability to borrow additional amounts as needed.

We may need to raise additional capital to continue to fund the growth of our business or repay our debt, which may not be available when needed, on acceptable terms or at all.

As of March 31, 2017, we had total liquidity of $97.9 million, consisting of cash and cash equivalents of $47.1 million and short-term investments of $50.8 million. Our business plan calls for approximately $29.0 million in capital expenditures for all of 2017, as well as additional capital expenditures thereafter. We will also require capital to make principal or interest payments on our indebtedness, either prior to or at their due dates, for any unanticipated expenses, and for any mergers, acquisitions or strategic investments. If we cannot fund any of these activities with cash provided by our operations, then we may seek to obtain additional capital from other sources, such as by selling assets or pursuing debt or equity financing.

(including through our established at-the-market offering program or other equity offerings) would increase the number of our outstanding shares and dilute the ownership interest of our stockholders. We may also pursue debt financing since, despite the high level of our existing indebtedness, the agreements governing much of this indebtedness do not restrict our ability to incur additional secured or unsecured debt or require us to maintain financial ratios or specified levels of net worth or liquidity. Debt financing options that we may pursue include, among others, equipment financing, sales of convertible notes, high-yield debt, asset-based loans, term loans, municipal bond financing, loans secured by receivables or inventory or commercial bank financing. Any debt financing we obtain may require us to make significant interest payments and to pledge some or all of our assets as security. In addition, higher levels of indebtedness could increase our risk of non-repayment and could adversely affect our creditworthiness, which could limit our ability to obtain further debt or equity financing as needed and restrict our flexibility in responding to any changes in business, industry or economic conditions. Further, we may incur substantial costs in pursuing any future capital-raising transactions, including investment banking, legal and accounting fees and costs. On the other hand, if we are unable to obtain capital in amounts sufficient to fund our contractual obligations, business plans, unanticipated expenses, capital expenditures, mergers, acquisitions or strategic investments, we could be forced to suspend, delay or curtail these plans, expenditures or other activities, which could negatively affect our business and prospects.

If our America’s Natural Gas Highway initiative fails and/or we do not achieve our objective to fuel a greater number of natural gas heavy-duty trucks, our financial results and business ~~prospects will~~would be materially and adversely affected.

We ~~believe the development and expansion~~are seeking to fuel a greater number of ~~the U.S.~~ natural gas heavy-duty ~~truck market,~~trucks, and ~~the execution of our initiative to build~~in connection with this effort, we have built a nationwide network of natural gas-truck friendly fueling stations, which we refer to as "America’s Natural Gas Highway" or ~~"ANGH,~~"ANGH." ~~depends upon the successful~~Our ability to successfully execute these initiatives is subject to substantial risks, including, among others:

The adoption of natural gas engines that are well-suited for ~~use~~heavy-duty trucks is essential to the success of these initiatives. We have no influence over the development, production, sales and marketing, cost or availability of natural gas trucks powered by ~~heavy-duty trucks. We~~these engines. Currently, Cummins Westport is the only natural gas engine manufacturer for the heavy -duty market in the United States, and we have no control over whether and the ~~marketing~~extent to which Cummins Westport will remain in the natural gas engine business or whether other manufacturers will enter this business.

These initiatives depend upon the development and ~~sales efforts for these engines~~expansion of the U.S. natural gas heavy-duty market. Operators may not adopt heavy-duty natural gas trucks due to cost, actual or ~~the success of these efforts, the retail price for these engines~~perceived performance issues, or ~~the number of these engines~~other factors that are ~~ultimately sold. Manufacturers may not produce natural gas engines in meaningful numbers or as quickly as we anticipate, which could delay the~~beyond our control. To date, adoption and deployment of natural gas trucks ~~by operators. Other factors potentially contributing to slow or~~have been slower and more limited ~~adoption of heavy-duty trucks powered by~~than we anticipated.

As a natural gas ~~engines are that these trucks cost more than comparable gasoline or diesel trucks~~heavy -duty truck market develops in the United States, truck and other vehicle operators may ~~experience, or be perceived to experience, more operational or performance issues. Our business would be harmed if meaningful numbers of natural gas heavy-duty truck engines are~~ not ~~deployed, if such deployment is slower than expected, or if a substantial number of the trucks that are deployed experience performance issues with their natural gas engines or are not fueled~~fuel at our ~~stations.~~stations due to lack of access or convenience, fuel prices or other factors.

The failure of our America’s Natural Gas Highway initiative and our inability to achieve our goal to fuel a substantial number of natural gas heavy-duty trucks would materially and adversely affect our financial results and business.

We are seeking to fuel a substantial number of natural gas heavy-duty trucks and in connection with that effort we are building America’s Natural Gas Highway. Our objectives to fuel a substantial number of heavy-duty trucks and build America’s Natural Gas Highway haveBuilding ANGH has required, and will continue to require, a ~~significant~~ commitment of capital and other resources and ~~our ability~~we may not be able to ~~successfully execute these plans faces substantial risks, including, among others:~~raise or generate sufficient capital to complete it.

Most of our ANGH stations were initially built to provide LNG, which costs more than CNG on an ~~energy equivalent~~energy-equivalent basis. We have been spending, and expect to continue to spend, additional capital to add CNG fueling capability to many of our ANGH stations, and we may not have sufficient capital in the future for this ~~purpose;~~purpose.

Our ANGH stations may experience mechanical or operational difficulties, which could require significant costs to repair and could reduce customer confidence in our ~~stations;~~

~~Truck and other vehicle operators may not fuel at our stations due to lack of access or convenience, fuel prices or other factors;~~

We have no influence over the development, production, cost or availability of natural gas trucks powered by engines that are well-suited for the U.S. heavy-duty truck market. Currently, Cummins Westport is the only natural gas engine manufacturer for the medium- and heavy-duty market, and we have no control over whether and the extent to which Cummins Westport will remain in the natural gas engine business or whether other manufacturers will enter the natural gas engine business;

Operators may not adopt heavy-duty natural gas trucks due to cost, actual or perceived performance issues, or other factors that are outside of our control. To date, adoption and deployment of natural gas trucks have been slower and more limited than we anticipated;stations.

We may not be able to obtain acceptable margins on fuel sales at ANGH ~~stations; and~~stations.

~~At September 30, 2016,~~As of March 31, 2017, we had 3938 completed ANGH stations that were not open for fueling operations. We expect to open these stations when we have sufficient customers to fuel at the locations, but we do not know when this will occur. ~~If we do not open the~~As long as these stations remain unopened, we will continue to have substantial investments in assets that do not produce ~~revenues equal to or greater than their costs, or at all.~~revenue.

We must effectively manage these risks in order to complete ANGH and ~~any other risks that may arise in connection with the ANGH build-out~~achieve our objective of fueling additional natural gas heavy-duty trucks. If we are not able to successfully execute our business plan. If the U.S. market for heavy-duty natural gas trucks does not develop or if we fail to successfully execute our ANGH initiative and fuel a substantial number of natural gas heavy-duty trucks,these initiatives, our financial results, operations and business, ~~and~~including our ability to repay our debt, ~~will~~would be materially and adversely affected.

Compliance with greenhouse gas emissions regulations affecting our LNG plants, LNG and CNG fueling stations or CNG, LNG and RNG fuel sales may prove costly and negatively affect our financial performance.

California has enacted laws that require statewide reductions of greenhouse gas emissions to 1990 levels by 2020, 40% below 1990 levels by 2030, and 80% below 1990 levels by 2050. As of January 1, 2015, California's AB 32 law began regulating the greenhouse gas emissions from transportation fuels, including the emissions associated with LNG and CNG vehicle fuel.

~~Automobile~~Under AB 32, the LNG vehicle fuel provider is the regulated party with respect to LNG vehicle fuel use. We will incur costs to comply with AB 32 based on how much LNG vehicle fuel we sell that is regulated, the guidance of the California Air Resources Board ("CARB") on the regulation of LNG vehicle fuel, any regulatory changes and ~~engine manufacturers produce very few~~the cost of carbon credits we purchase to comply with AB 32. We anticipate that we will pass the costs we incur to comply with this law through to our LNG customers. With respect to CNG, the regulated party under AB 32 is the utility that owns the pipe through which the fossil fuel natural gas ~~vehicles~~is sold. We anticipate that, over time, as the utilities' compliance costs increase, we or, to the extent we pass these costs through to our customers, our CNG customers will be required to pay more for CNG vehicle fuel to cover the increased AB 32 compliance costs of the utility. The amount of these costs that we or our CNG customers will be required to pay will be determined by the amount the utility spends to buy any carbon credits needed to comply with AB 32 and ~~engines~~the amount of natural gas we or our customers buy through a utility’s pipeline. These increased costs of LNG and CNG vehicle fuel as a result of AB 32 may diminish the attractiveness of LNG and CNG as a vehicle fuel for ~~the United States~~existing and ~~Canadian markets,~~potential future California customers, which ~~limits~~could reduce our customer base and fuel sales and cause our performance to suffer.

Although our Redeem™ RNG vehicle fuel may qualify for an exemption from AB 32 when sold as LNG or CNG, the availability of any such exemption is uncertain at this time due to the complexity of the requirements that must be met in order to qualify for an exemption and the possibility of changes to the law. Any Redeem™ volumes that are not exempt would incur compliance costs commensurate with sales of CNG and LNG ~~and RNG.~~derived from fossil fuel natural gas.

~~Limited availability of natural gas vehicles and engine sizes, including heavy-duty trucks~~The federal and other ~~types of vehicles, restricts their large-scale introduction~~state governments are also considering measures to regulate and ~~limits our natural~~reduce greenhouse gas fuel sales. Limited production could also increase the cost to purchase natural gas vehicles. Original equipment manufacturers produce a relatively small number of natural gas engines and vehicles in the U.S. and Canadian markets and they may not decide to expand, or they may decide to discontinue or curtail, their natural gas engine or vehicle product lines. Additionally, engines that are produced may experience performance issues or be subject to recalls. As a resultemissions. Any of these regulations, if and ~~other factors,~~when implemented, may regulate the ~~limited supply of natural~~greenhouse gas ~~vehicles could restrict~~emissions produced by or associated with our ~~ability to promote~~LNG production plants, our CNG and ~~achieve widespread adoption of natural gas vehicles, which could harm our business and prospects.~~

~~Our business is influenced by environmental, tax and other government regulations, programs and incentives that promote~~LNG fueling stations or ~~encourage cleaner burning fuels and alternative vehicles and their adoption, modification or repeal could impact our business.~~

~~Our business is influenced by federal, state and local government tax credits, rebates, grants and similar programs and incentives that promote~~ the ~~use of~~ CNG, LNG and RNG aswe sell, and could require us to obtain emissions credits or invest in costly emissions prevention technology. We cannot estimate the costs that may be required to comply with potential federal, state or local regulation of greenhouse gas emissions, and these unknown costs are not contemplated by our existing customer agreements or our budgets and cost estimates. If any of these regulations are implemented, any associated compliance costs that we are not able to pass through to our customers may have a ~~vehicle fuel, as well as by laws, rules~~negative impact on our financial performance, reduce our margins, impair our ability to fulfill customer contracts and ~~regulations that require reductions in carbon emissions. Parties with an interest in gasoline~~reduce our cash available for other aspects of our business, including operating costs, investments and diesel or alternative fuels such as renewable diesel, hydrogen- or electric-powered vehicles, many of which have substantially greater resources and influence than we have, invest significant time and money in efforts to delay, repeal or otherwise negatively influencedebt repayments. Further, these regulations and ~~programs that promote~~any increased customer costs may discourage consumers from adopting natural gas as a vehicle fuel. Any failure to adopt, delay in implementing, expiration, repeal or modification of federal, state or local regulations, programs or incentives that encourage the use of CNG, LNG and RNG as a vehicle fuel, or the adoption of any such regulations, programs or incentives that encourage the use of other alternative fuels or alternative vehicles instead of natural gas, could harm our operating results and financial condition. Additionally, changes to or the repeal of laws, rules and regulations that mandate reductions in carbon emissions and/or the use of renewable fuels, including the California and Oregon Low Carbon Fuel Standards and the federal Renewable Fuel Standard Phase 2, under which we generate credits ("LCFS Credits" and "RIN Credits" or "RINs", respectively) by selling CNG, LNG and RNG as a vehicle fuel, could adversely affect our financial condition. Further, our business would be adversely affected if grant funds cease to be available under government programs for the purchase and construction of natural gas vehicles and stations.

~~We face increasing competition from a variety of businesses, many of which have far greater resources and brand awareness than we have.~~

A significant number of established businesses, including oil and gas companies, alternative vehicle and alternative fuel companies, refuse collectors, natural gas utilities and their affiliates, industrial gas companies, truck stop and fuel station owners, fuel providers and other organizations have entered or are planning to enter the market for natural gas and other alternatives for use as vehicle fuels. Additionally, for certain of our key customer markets, such as airports and taxis, we indirectly compete with companies such as Uber and Lyft that provide alternative transportation methods. Further, we compete with producers and sellers of gasoline and diesel fuels, which power the vast majority of vehicles in the United States and Canada, suppliers of other alternative vehicle fuels and providers of hybrid and electric vehicles. Many of these current and potential competitors have substantially greater financial, marketing, research and other resources than we have. New technologies and improvements to existing technologies may make alternatives other than natural gas more attractive to the market, or may slow the development of the market for natural gas as a vehicle fuel if such advances are made with respect to oil and gas usage. Natural gas utilities and their affiliates also own and operate natural gas fueling stations that compete with our stations, or are preparing to enter the natural gas vehicle fuel market. Utilities and their affiliates typically have unique competitive advantages, including a lower cost of capital, substantial and predictable cash flows, long-standing customer relationships, greater brand awareness and large and well-trained sales and marketing organizations.

We expect competition to increase in the alternative vehicle fuels market generally and, if the use of natural gas vehicles and the demand for natural gas vehicle fuel increases, the market for natural gas vehicle fuel. Any such increased competition would lead to amplified pricing pressure, reduced operating margins and fewer expansion opportunities.

~~If there are advances in other alternative vehicle fuels or technologies, or if there are improvements in gasoline, diesel or hybrid engines, demand for natural gas vehicles may decline.~~

Technological advances in the production, delivery and use of alternative fuels that are, or are perceived to be, cleaner, more cost-effective or more readily available than CNG, LNG or RNG have the potential to slow or limit adoption of natural gas vehicles. Advances in gasoline and diesel engine technology, including efficiency improvements and further development of hybrid engines, may also offer a cleaner, more cost-effective option and make fleet customers less likely to convert their vehicles to natural gas. Technological advances related to ethanol or biodiesel, which are used as an additive to, or substitute for, gasoline and diesel fuel, may slow the need to diversify fuels and affect the growth of the natural gas vehicle fuel market.

Use of electric heavy-duty trucks, buses and refuse trucks, or the perception that such vehicles may soon be widely available and provide satisfactory performance at an acceptable cost, may reduce demand for natural gas vehicles. In addition, renewable diesel, hydrogen and other alternative fuels in experimental or developmental stages may prove to be cleaner, more cost-effective alternatives to gasoline and diesel than natural gas. Advances in technology that slow or curtail the growth of natural gas vehicle purchases or conversions, or that otherwise reduce demand for natural gas as a vehicle fuel would have an adverse effect on our business. Failure of natural gas vehicle technology to advance may also limit its adoption and our ability to compete with gasoline-and diesel-powered vehicles and other alternative fuels and alternative vehicles.

We are subject to risks associated with station construction and similar activities, including difficulties identifying suitable station locations, zoning and permitting issues, local resistance, cost overruns, delays and other contingencies.

In connection with our station construction operations, we may not be able to identify, obtain and retain sufficient permits, approvals and other rights to use suitable locations for the stations we or our customers seek to build. We may also encounter land use or zoning difficulties or local resistance that prohibit us or our customers from building new stations on preferred sites or limit or restrict the use of new or existing stations. Any such difficulties, resistance or limitations could harm our business and results of operations. In addition, we act as the general contractor and construction manager for station construction and facility modification projects and typically rely on licensed subcontractors to perform the construction work. We may be liable for any damage we or our subcontractors cause, or for injuries suffered by our employees or our subcontractors’ employees, during the course of our projects. Shortages of skilled subcontractor labor for our projects could significantly delay a project or otherwise increase our costs. Our profit on our projects is based in part on assumptions about the cost of the projects and cost overruns, delays or other execution issues may, in the case of projects that we complete and sell to customers, result in our failure to achieve our expected margins or cover our costs, and in the case of projects that we build and own, result in our failure to achieve an acceptable rate of return.

Clean Energy Compression's manufacturing operations could subject us to significant costs and other risks, including product liability claims.

Our subsidiary, Clean Energy Compression, designs, manufactures, sells and services non-lubricated natural gas fueling compressors and related equipment used in CNG and LNG fueling stations. ~~The~~This equipment ~~Clean Energy Compression produces and sells~~ may fail to perform as expected or according to legal or contractual specifications. Additionally, Clean Energy Compression may incur significant and unexpected costs during or after the manufacture of its products, including costs incurred to repair product failures or malfunctions. The scope and likelihood of these risks may increase if Clean Energy Compression makes efforts to expand its services to new geographic and other markets. Further, the success of our compressor business is dependent upon the success of the natural gas vehicle fuels market generally, and is thus subject to many of the other risks described in these risk factors. The occurrence of any of these risks may reduce sales of Clean Energy Compression's products and services and ~~revenues~~revenue to us from this business, ~~damage our customer relationships and reputation,~~ delay the launch of new Clean Energy Compression products or services, damage our customer relationships and ~~services,~~reputation, force product recalls ~~and/~~or result in product liability claims.

~~Our warranty reserves may not adequately cover our warranty obligations.~~

We provide product warranties with varying terms and durations for natural gas compressors and stations we build and sell to customers, and we establish reserves for the estimated liability associated with these product warranties. Our warranty reserves are based on historical trends as well as our understanding of specifically identified warranty issues, and the amounts estimated for these reserves could differ materially from the warranty costs that may actually be realized. We would be adversely affected by an increase in the rate of warranty claims or the amounts involved with warranty claim or by the occurrence of unexpected warranty claims.

~~Increased global IT security threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, products, solutions and services.~~

Increased global IT security threats and more sophisticated and targeted computer crime pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. Depending on their nature and scope, such threats could potentially lead to the compromise of confidential information, improper use of our systems and networks, manipulation and destruction of data and operational disruptions.

The global scope of Clean Energy Compression's operations exposes us to additional risks and uncertainties.

Clean Energy Compression ~~has~~manufactures its natural gas fueling compression equipment primarily in Canada and sells this equipment globally through its operations in Canada, the People's Republic of China, Colombia, Bangladesh and Peru. ~~Clean Energy Compression’s natural gas compression equipment is primarily manufactured in Canada and sold globally, which~~The global scope of these operations exposes us to a number of risks and uncertainties that can arise from international trade transactions, local business practices and cultural ~~considerations.~~

In addition to the other risks described in these risk factors, the global scope of our Clean Energy Compression's operations may subject us to risks and uncertainties that could limit our operations, increase our costs or otherwise negatively impact our business and financial condition,considerations, including, among others:

Failure to comply with the United States Foreign Corrupt Practices Act and other applicable anti-bribery laws;

Political unrest, terrorism, war, natural disasters and economic and financial instability;

Low prices for locally produced oil, gasoline, diesel or ~~diesel;~~other alternative fuels;

~~Changes in~~Differing environmental and other regulatory ~~requirements and uncertainty~~requirements;

Uncertainty related to developing legal and regulatory systems and standards for economic and business activities, real property ownership and application of contract rights;

Trade restrictions or barriers, including tariffs or other charges, and import-export ~~regulations;~~regulations, which are subject to increased uncertainty following the results of the 2016 U.S. presidential election and the trade policies of the current administration regarding existing and proposed trade agreements and the ability to import goods into the United States;

Difficulties enforcing agreements and collecting receivables;

Difficulties complying with the laws and regulations of multiple jurisdictions;

Difficulties ensuring that health, safety, environmental and other working conditions are properly implemented and/or maintained by local offices;

Differing employment practices and/or labor issues, including wage inflation, labor unrest and unionization policies;

Limited intellectual property protection;

Longer payment cycles by international customers;

Inadequate local infrastructure and disruptions of service from utilities or telecommunications providers, including electricity shortages;

Difficulties forecasting demand and sales trends in foreign markets;

Risks associated with currency exchange and convertibility, including vulnerability to appreciation and depreciation of foreign currencies against the U.S. dollar;

Uncertain repatriation of earnings as a result of economic, monetary and regulatory factors in some countries that affect our ability to convert funds to U.S. dollars or move funds from accounts in these countries; and

Potentially adverse tax consequences.

~~In addition~~These risks and uncertainties could limit our operations, increase our costs or expose us to fines or other legal sanctions or damages, any of which would negatively impact our business and financial condition.

Our RNG business may not be successful.

On March 31, 2017, we completed the ~~above, we also face risks associated with currency exchange~~sale of certain assets related to our RNG business, including our former RNG production facilities, to BP Products North America, Inc. ("BP"). Following this sale, our RNG business consists of purchasing RNG from BP and ~~convertibility, inflation~~other third-party producers and ~~repatriation of earnings~~reselling this RNG through our natural gas fueling infrastructure as Redeem™, our RNG vehicle fuel.

As a result, the success of our ~~foreign operations. In some countries, economic, monetary and regulatory factors could affect~~RNG business depends on our ability to ~~convert funds~~secure, on acceptable terms, a sufficient supply of RNG from BP and other third-parties, and to ~~United States dollars~~either sell this RNG at a substantial premium to conventional natural gas prices or ~~move funds from accounts in these countries. We are also vulnerable~~ to ~~appreciation or depreciation of foreign currencies against the United States dollar, which could negatively impact our operating results and financial performance.~~

We depend on key people to operate our business, and if we are unable to retain our key people or hire additional qualified people, our ability to develop and successfully market our business would be harmed.

We believe that our future success is highly dependent on the contributions of our executive officers, as well as our ability to attract and retain highly skilled managerial, sales, technical and finance personnel. Qualified individuals are in high demand, andsell, at favorable prices, credits we may ~~incur significant costs to attract~~generate under applicable federal or state laws, rules and ~~retain them.~~

~~All of our executive officers~~regulations, including RINs and ~~other United States employees may terminate their employment relationships with us at any time, and in many cases their knowledge of our business and industry would be extremely difficult to replace.~~LCFS Credits. If we are ~~unable to retain~~not successful at one or more of these activities, our ~~executive officers~~RNG business could fail and ~~key employees or, if such individuals leave~~ our ~~Company, we are unable to attract and successfully integrate quality replacements, our business, operating results~~performance and financial condition could be materially harmed.

Our ability to maintain an adequate supply of RNG may be subject to risks affecting RNG production. Projects that produce pipeline-quality RNG often experience difficulties due to a variety of factors, including, among others, unpredictable RNG production levels caused by problems with key equipment, severe weather, landfill conditions or construction delays; technological difficulties and high costs associated with operating the production projects; limited availability or unfavorable composition of collected landfill gas; and plant shutdowns caused by upgrades, expansion or required maintenance. If any of our

RNG suppliers experience these or other difficulties, then our supply of, and ability to resell, RNG as a vehicle fuel could be jeopardized.

In addition, our ability to generate revenue from our sale of RNG or our generation and sale of RINs and LCFS Credits depends on a number of factors, including the market for RNG as a vehicle fuel and for these credits. In the past, both of these markets have been volatile and unpredictable, and the prices for RNG as a vehicle fuel and for RINs and LCFS Credits have been subject to significant fluctuations. Additionally, the value of RINs and LCFS Credits, and consequently the revenue levels we may receive from our sale of these credits, may be adversely affected by any changes to federal and state programs under which these credits are generated and sold. For example, CARB recently raised the carbon intensity rating of the RNG we sell in California, which reduced the amount of LCFS Credits we generate. Further, following the completion of our sale of certain assets related to our RNG business, we expect the amount of revenue we generate from sales of RINs and LCFS Credits will decrease, which could adversely affect our financial results, particularly in the near term. Moreover, in the absence of federal and state programs that support premium prices for RNG or that allow us to generate and sell LCFS Credits and RINs or other credits, or if our customers are not willing to pay a premium for RNG, we may be unable to operate our RNG business profitably or at all.

In connection with our station construction operations, we may not be able to identify suitable locations for the stations we or our customers seek to build. Additionally, even if preferred sites can be located, we may encounter land use or zoning difficulties, challenges obtaining and retaining required permits and approvals or other local resistance, any of which could prevent us or our customers from building new stations on these sites or limit or restrict the use of new or existing stations. Any such difficulties, resistance or limitations or any failure to comply with local permit, land use or zoning requirements could restrict our station construction activity or expose us to fines, reputational damage or other liabilities, which would harm our business and results of operations. In addition, we act as the general contractor and construction manager for station construction and facility modification projects and typically rely on licensed subcontractors to perform the construction work. We may be liable for any damage we or our subcontractors cause or for injuries suffered by our employees or our subcontractors’ employees during the course of our projects. Additionally, shortages of skilled subcontractor labor for our projects could significantly delay a project or otherwise increase our costs. Further, our profit from our projects is based in part on assumptions about the cost of the projects and cost overruns, delays or other execution issues may, in the case of projects we complete and sell to customers, result in our failure to achieve our expected margins or cover our costs, and in the case of projects we build and own, result in our failure to achieve an acceptable rate of return.

We have significant contracts with government entities, ~~that~~which are subject to unique risks.

We have, and ~~will~~expect to continue to seek, long-term CNG, LNG and RNG station construction, maintenance and fuel sales contracts with various government bodies, which accounted for approximately 17% of our revenue for the three months ended March 31, 2017 and approximately 18%, 18% and 16% of our ~~revenues for the nine months ended September 30,~~revenue in 2014, 2015 and 2016, ~~and approximately 19%, 18% and 18% of our revenues in 2013, 2014 and 2015,~~ respectively.

In addition to normal business risks, including the other risks discussed in these risk factors, our contracts with government entities are often subject to unique risks, some of which are beyond our control. Long-term government contracts and related orders are subject to cancellation if adequate appropriations for subsequent performance periods are not made. The termination of funding for a government program supporting any of our government contracts could result in a loss of anticipated future ~~revenues~~revenue attributable to ~~that~~the contract, which could have a negative impact on our operations.

In addition, government entities with which we contract are often able to modify, curtail or terminate contracts with us at their convenience and without prior notice and would only be required to pay for work completed and commitments made at the time of termination. Modification, curtailment or termination of significant government contracts could have a material adverse effect on our results of operations and financial condition. Further, government contracts are frequently awarded only after competitive bidding processes, which are often protracted. In many cases, unsuccessful bidders for government contracts are provided the opportunity to formally protest certain contract awards through various agencies or other administrative and judicial channels. The protest process may substantially delay a successful bidder’s contract performance, result in cancellation of the contract award entirely and distract management. As a result, we may not be awarded contracts for which we bid and substantial delays or cancellation of contracts may follow any successful bids as a result of these protests.

Our operations entail inherent safety and environmental risks that may result in substantial liability to us.

Our operations entail inherent safety risks, including risks associated with equipment defects, malfunctions, failures, and misuses, any of which could result in uncontrollable flows of natural gas, fires, explosions or other damage. For example, operation of LNG pumps requires special training because of the extremely low temperatures of LNG. Also, LNG tanker trailers and CNG fuel tanks and trailers, if involved in accidents or improper maintenance or installation, may rupture and result in explosions, fires

and other damage, including death or serious injury. Further, refueling of natural gas vehicles or operation of natural gas vehicle fueling stations could result in venting of methane gas, which is a potent greenhouse gas, and such ~~protests.~~methane emissions are regulated by some state regulatory agencies and may in the future be regulated by the U.S. Environmental Protection Agency and/or additional state regulators. These safety and environmental risks may expose us to liability for personal injury, wrongful death, property damage, pollution and other environmental damage. We may incur substantial liability and costs if damages are not covered by insurance or are in excess of policy limits or if environmental damage causes us to violate applicable greenhouse gas emissions or other environmental laws. Moreover, any of these occurrences could harm our reputation, our business and adoption levels of natural gas generally.

Our business is subject to a variety of government regulations that may restrict our operations and result in costs and penalties.

We are subject to a variety of federal, state and local laws and regulations relating to the environment, health and safety, labor and employment, building codes and construction, zoning and land use, foreign business practices, public reporting and taxation, among others. Additionally, we are subject to changing and complex regulations related to the government procurement process and any political activities or lobbying relating to natural gas or greenhouse gas emissions regulations in which we may engage. It is difficult and costly to manage the requirements of every authority having jurisdiction over our various activities and to comply with their varying standards. These laws and regulations are complex, change frequently and in many cases have become more stringent over time. Any changes to existing regulations or adoption of new regulations may result in significant additional expense to us and our customers. Further, from time to time, as part of the regular evaluation of our operations, including newly acquired or developing operations, we may be subject to compliance audits by regulatory authorities, which may distract management from our operations and involve significant costs and use of other resources. Also, in connection with our operations, we often need to obtain facility permits or licenses to address, among other things, storm water or wastewater discharges, waste handling and air emissions, which may subject us to onerous or costly permitting conditions or delays if permits cannot be timely obtained.

Our failure to comply with any applicable laws and regulations may result in a variety of administrative, civil and criminal enforcement measures, including assessment of monetary penalties, imposition of corrective requirements, or prohibition from providing services to government entities.

We may from time to time pursue acquisitions, divestitures, investments or other strategic relationships or transactions, which could fail to meet expectations or otherwise harm our business.

We may acquire or invest in other companies or businesses or pursue other strategic transactions or relationships. Acquisitions, investments and other strategic transactions and relationships involve numerous risks, any of which could harm our business, including, among others:

Difficulties integrating the technologies, operations, contracts, personnel and service providers of an acquired company or partner;

Diversion of financial and management resources from existing operations or alternative acquisition, investment or other opportunities;

Failure to realize the anticipated benefits or synergies of a transaction or relationship;

Failure to identify all of the problems, liabilities, shortcomings or challenges of a company or technology we may partner with, invest in or acquire, including issues related to intellectual property rights, regulatory compliance practices, revenue recognition or other accounting practices or employee, customer or vendor relationships;

Risks of entering new customer or geographic markets in which we may have limited or no experience;

Potential loss of an acquired company's, business' or partners' key employees, customers or vendors in the event of an acquisition or investment, or potential loss of our assets, employees or customers in the event of a divestiture or other similar strategic transaction;

Inability to generate sufficient revenue to offset costs related to an acquisition, investment or other transaction;

Additional costs or incurrence of debt or equity dilution associated with funding an acquisition, investment or other relationship; and

Possible write-offs or impairment charges relating to any businesses we partner with, invest in or acquire.

Our quarterly results of operations fluctuate significantly and are difficult to predict.

Our quarterly results of operations have historically experienced, and may continue to experience, significant fluctuations as a result of a variety of factors, including the amount and timing of compressor and other equipment sales, station construction sales, sales of RINs and LCFS Credits and recognition of other government credits, fluctuations in commodity costs and natural gas prices and sale activity, and the amount and timing of our billing, collections and liability payments, as well as the other factors described in these risk factors.

The significant fluctuations of our operating results in prior periods may render period-to-period comparisons less meaningful and investors in our securities should not rely on the results of any one quarter as an indicator of future performance. For example, our results for the quarterly periods ended March 31, 2016 and March 31, 2017 were positively affected by gains related to repurchases or retirements of our outstanding convertible debt, and our results for the quarterly period ended March 31, 2017 were also positively affected by a gain related to our sale of certain assets related to our RNG business. These or other gains or losses may not recur regularly, in the same amounts or at all in future periods.

We depend on key people to generate our strategies and operate our business, and our business could be harmed if we are unable to retain these key people.

We believe that our future success is dependent upon the contributions of our officers and directors and certain other key managerial, sales, technical and finance personnel. All of our officers and other United States employees may terminate their employment relationships with us at any time. Additionally, our directors may resign at any time or fail to be re-elected by our stockholders on an annual basis. In many cases, these individuals’ knowledge of our business and experience in our industry would be extremely difficult to replace. Additionally, qualified individuals are in high demand, and we may incur significant costs to attract and retain our key people. If we are unable to retain our officers, directors and other key employees, or if these individuals leave our Company and we are unable to attract and successfully integrate quality replacements in a timely manner, our business, operating results and financial condition could be harmed.

Natural gas purchase commitments may exceed demand, which could cause our costs relative to our ~~revenues~~revenue to increase.

We are a party to two long-term natural gas purchase agreements that have a take-or-pay commitment, and we may enter into additional similar contracts ~~with take-or-pay commitments~~ in the future. Take-or-pay commitments require us to pay for the natural gas that we have agreed to purchase irrespective of whether we can sell the gas. If the market for natural gas as a vehicle fuel declines or fails to develop as we anticipate, if we lose significant natural gas vehicle fueling customers, or if demand under any existing or ~~any~~ future sales contract does not maintain its volume levels or grow, these commitments may exceed our natural gas demand, which could cause our operating and supply costs to increase without a corresponding increase in revenue and our margins and performance may be negatively impacted.

Compliance with greenhouse gas emissions regulations affecting our LNG plants, RNG production facilities, LNG and CNG fueling stations or CNG, LNG and RNG fuel sales may prove costly and negatively affect our financial performance.

California has adopted legislation, AB 32, that calls for a cap on greenhouse gas emissions throughout California and a statewide reduction to 1990 levels by 2020 and an additional 80% reduction below 1990 levels by 2050. Further, in 2015 the Governor of California issued an executive order mandating a reduction in greenhouse gas emissions by 40% compared to 1990 levels by 2030. As of January 1, 2015, AB 32 began regulating the greenhouse gas emissions from transportation fuels, including the emissions associated with LNG and CNG vehicle fuel.

Under AB 32, the LNG vehicle fuel provider is the regulated party with respect to LNG vehicle fuel use. In 2016, we were required to pay $154,560 to comply with AB 32 with respect to our LNG vehicle fuel sales in California. Our costs in future years will depend on how much LNG vehicle fuel we sell that is regulated, the California Air Resources Board's ("CARB") guidance on the regulation of LNG vehicle fuel, potential regulatory changes and the cost of carbon credits we purchase to comply with AB 32 at the time we purchase them. We anticipate that we will pass the costs we incur to comply with this legislation through to our LNG vehicle fuel customers, which may diminish the attractiveness of LNG as a vehicle fuel for California customers. With respect to CNG, the regulated party under AB 32 is the utility that owns the pipe through which the fossil fuel natural gas is sold. SoCalGas, the Southern California gas utility, has recently announced that it intends to charge CNG fueling customers an additional $0.27 per MMBtu of CNG sold to cover its AB 32 compliance costs. We anticipate that we will pass these additional utility fees through to our customers, which may diminish the attractiveness of CNG as a vehicle fuel for California customers. In addition, we anticipate that, over time, as the utilities' compliance costs increase, we or our CNG customers will be required to pay more for CNG vehicle fuel to cover the increased AB 32 compliance costs of the utility. These costs will be determined by the amount the utility spends to buy any carbon credits needed to comply with AB 32 as a result of the natural gas we or our customers buy through the utility’s pipeline.

Although our Redeem™ RNG vehicle fuel may qualify for an exemption from AB 32 when sold as LNG or CNG, the complexity of the requirements that biomethane must meet in order to qualify for an exemption and the possibility of changes to the legislation make any exemption uncertain at this time. Any Redeem™ volumes that are not exempt would incur compliance costs commensurate with sales of CNG and LNG derived from fossil fuel natural gas.

The federal government and other state governments are considering similar measures to regulate and reduce greenhouse gas emissions. Any of these regulations, when and if implemented, may regulate the greenhouse gas emissions produced by our LNG production plants, our CNG and LNG fueling stations or our RNG production facilities, and/or the greenhouse gas emissions associated with the CNG, LNG and RNG we sell, and could require us to obtain emissions credits or invest in costly emissions prevention technology. We cannot currently estimate the potential costs associated with compliance with potential federal, state or local regulation of greenhouse gas emissions and these unknown costs are not contemplated by our current customer agreements or our budgets and cost estimates.

If any of these regulations are implemented, our associated compliance costs may have a negative impact on our financial performance, reduce our margins and impair our ability to fulfill customer contracts, and could also reduce our cash available for other aspects of our business, including operating costs, investments and debt repayments. Further, these regulations may discourage consumers from adopting natural gas as a vehicle fuel.

~~Our operations entail inherent safety and environmental risks that may result in substantial liability to us.~~

Our operations entail inherent risks, including equipment defects, malfunctions, failures, and misuses, which could result in uncontrollable flows of natural gas, fires, explosions and other damage. For example, operation of LNG pumps requires special training because of the extremely low temperatures of LNG. Also, LNG tanker trailers have in the past been, and may continue to be, involved in accidents that result in explosions, fires and other damage. Further, refueling of natural gas vehicles or operation of natural gas vehicle fueling stations could result in venting of methane gas, which is a potent greenhouse gas, and such methane emissions are currently regulated by some state regulatory agencies and may in the future be regulated by the U.S. Environmental Protection Agency and/or by additional state regulators. Additionally, CNG fuel tanks and trailers, if damaged by accidents or improper maintenance or installation, may rupture and the contents of the tank or trailer may rapidly decompress and result in death or serious injury. These safety and environmental risks may expose us to liability for personal injury, wrongful death, property damage, pollution and other environmental damage. We may incur substantial liability and costs if damages are not covered by insurance or are in excess of policy limits. Moreover, any of these occurrences could harm our reputation, our business and adoption levels of natural gas generally.

We provide financing to fleet customers for natural gas vehicles, which exposes our business to credit risks.

We lend to certain qualifying customers a portion, and occasionally ~~up to 100%~~all of the purchase price of natural gas vehicles they agree to purchase. ~~Risks associated with these~~These financing activities ~~include,~~involve a number of risks, including, among others, that: the equipment financed consists mostly of vehicles, ~~that~~which are mobile and easily damaged, lost or stolen; and the borrower may default on payments, enter bankruptcy proceedings and/or liquidate. ~~At September 30, 2016,~~As of March 31, 2017, we had ~~$13.2~~$9.3 million outstanding in loans provided to customers to finance natural gas vehicle purchases.

Our ~~business is subject to a variety~~warranty reserves may not adequately cover our warranty obligations, which could result in unexpected costs.

We provide product warranties with varying terms and durations for the natural gas fueling compressors we manufacture and sell and the stations we build and sell, and we establish reserves for the estimated liability associated with these product warranties. Our warranty reserves are based on historical trends as well as our understanding of ~~government regulations~~specifically identified warranty issues, and the amounts estimated for these reserves could differ materially from the warranty costs that may ~~restrict our operations and result in costs and penalties.~~

actually be realized. We are subject to a variety of federal, state and local laws and regulations relating to the environment, health and safety, labor and employment, building codes and construction, zoning and land use, foreign business practices and taxation, among others. Additionally, we are subject to changing and complex regulations related to the government procurement process and any political activities or lobbying relating to natural gas or greenhouse gas emissions regulations in which we may engage. It is difficult and costly to manage the requirements of every individual authority having jurisdiction over our various activities and to comply with these varying standards. These laws and regulations are complex, change frequently and in many cases have tended to become more stringent over time. Any changes to existing regulations or adoption of new regulations may result in significant additional expense to us and our customers. Further, from time to time, as part of the regular evaluation of our operations, including newly acquired or developing operations, we may be subject to compliance audits by regulatory authorities, which may involve significant costs and use of other resources. Also, in connection with our operations, we often need facility permits or licenses to address, among other things, storm water or wastewater discharges, waste handling and air emissions, which may subject us to onerous or costly permitting conditions.

Our failure to comply with any applicable laws and regulations may result in a variety of administrative, civil and criminal enforcement measures, including assessment of monetary penalties, the imposition of corrective requirements, or prohibition from providing services to government entities.

~~Our RNG business may not be successful.~~

We own RNG production facilities located in Canton, Michigan and North Shelby, Tennessee. We are also seeking to increase our RNG business by pursuing additional projects on our own and with project partners.

We may not be successful in operating or developing these projects or any future projects or generating a financial return from our investments. Historically, projects that produce pipeline-quality RNG have often failed due to the volatile prices of conventional natural gas, unpredictable RNG production levels, technological difficulties and costs associated with operating the production facilities and a general lack of government programs and regulations that support these activities.

The success of our RNG business depends on our ability to obtain necessary financing, to successfully manage the construction and operation of our RNG production facilities, to enter into RNG supply agreements with third parties, and to either sell RNG at substantial premiums to conventional natural gas prices or to sell, at favorable prices, credits we may generate under

~~federal or state laws, rules and regulations, including RINs and LCFS Credits. If we are not successful at one or more of these activities, our RNG business could fail.~~

The market for RINs and LCFS Credits is volatile, and the prices for these credits are subject to significant fluctuations. We have entered into futures contracts for the sale of specified amounts of RINs over specified periods and at fixed prices. These futures contracts subject us to risks based on fluctuations in the prevailing market price for RINs, since we could be forced to purchase RINs in the open market if we are not able to produce sufficient RINs through our operations to satisfy our obligations under these futures contracts.

~~The value of RINs and LCFS Credits may~~would be adversely affected by any changes to federal and state programs under which these credits are generated and sold. For example, CARB recently raised the carbon intensity rating of the RNG we sell in California, which will reduce the amount of LCFS Credits we generate and could adversely affect our RNG business and our financial results. Additionally,an increase in the ~~absence~~rate of ~~federal and state programs that support premium prices for RNG~~warranty claims or ~~that allow us to generate and sell LCFS Credits and RINs~~the amounts involved in warranty claims or ~~other credits, or if our customers are not otherwise willing to pay a premium for RNG, we may be unable to profitably operate our RNG business.~~

~~We have experienced, and may continue to experience, difficulties producing RNG.~~

~~We have experienced difficulties producing~~by the ~~expected volumes~~occurrence of RNG at our RNG plants due to, among other factors, problems with key equipment, severe weather, landfill conditions and construction delays. These difficulties may continue or worsen in the future. Additionally, our ability to produce RNG may be adversely affected by a number of other factors, including, among others, limited availability or unfavorable composition of collected landfill gas, failure to obtain and renew necessary permits and landfill mismanagement. In addition, we may seek to or be required to upgrade, expand or service our RNG facilities, which may result in plant shutdowns, cause delays that reduce the amount of RNG we produce or involve significant unexpected ~~costs.~~

~~We may from time to time pursue acquisitions, investments or other strategic relationships, which could fail to meet expectations.~~

We may acquire or invest in other companies or businesses or pursue other strategic transactions or relationships. Acquisitions, investments and other strategic partnerships and relationships involve numerous risks,warranty claims, any of which could ~~harm~~increase our ~~business, including, among others:~~costs beyond our established reserves and cause our cash position and financial condition to suffer.

~~Difficulties integrating~~Increased global IT security threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, products, solutions and services.

Increased global IT security threats and more sophisticated and targeted computer crime pose a risk to the ~~technologies, operations, existing contracts~~security of our systems and ~~personnel~~networks and the confidentiality, availability and integrity of ~~an acquired company or partner;~~our data. Depending on their nature and scope, such

~~Difficulties supporting and transitioning vendors of an acquired company or partner;~~

~~Diversion of financial and management resources from existing operations or alternative acquisition or investment opportunities;~~

~~Failure to realize the anticipated benefits or synergies of a transaction or relationship;~~

~~Risks of entering new customer or geographic markets in which we may have limited or no experience;~~

~~Potential loss of key employees, customers and vendors from an acquired company’s or partner’s business;~~

~~Inability to generate sufficient revenue to offset acquisition, investment or other related costs;~~

~~Additional costs or incurrence of debt or equity dilution associated with funding an acquisition, investment or other relationship; and~~

~~Possible write-offs or impairment charges relating~~threats could potentially lead to the ~~businesses we partner with, invest in or acquire.~~

~~Our quarterly results~~compromise of ~~operations fluctuate significantly and are difficult to predict.~~

Our quarterly results of operations have historically experienced significant fluctuations and may continue to fluctuate significantly as a result of a variety of factors, including the amount and timing of compressor and other equipment sales, station construction sales, sales of RINs and LCFS Credits and recognition of VETC and other credits, fluctuations in commodity costs,

natural gas prices and sale activity and the other factors described in these risk factors. If our quarterly results of operations fall below the expectations of securities analysts or investors, the priceconfidential information, improper use of our ~~common stock could decline substantially.~~

~~As a result~~systems and networks, manipulation and destruction of ~~the significant fluctuations of our operating results in prior periods, period- to-period comparisons of our operating results may not be meaningful~~data and investors in our common stock should not rely on the results of any one quarter as an indicator of future performance. For example, in the quarterly periods ended March 31, 2016, June 30, 2016 and September 30, 2016, our results were positively affected by gains related to repurchases or retirements of our outstanding convertible debt, and such gains may not recur regularly, in the same amounts or at all in future periods.operational disruptions.

Risks Related to Our Common Stock

Sales of ~~shares~~our common stock, or the perception that such sales may occur, could cause the market price of our stock to drop significantly, ~~even if~~regardless of the state of our ~~business is doing well.~~business.

As of ~~September 30, 2016,~~March 31, 2017, there were ~~134,235,058~~149,722,174 shares of our common stock outstanding, ~~11,582,091~~12,426,603 shares underlying outstanding stock options, ~~2,432,930~~4,124,650 shares underlying outstanding restricted stock units, 1,000,000 shares underlying outstanding warrants (all of which were exercised on a cashless basis subsequent to September 30, 2016, resulting in our issuance of an aggregate of 997,740 shares of our common stock) and ~~21,006,491~~14,991,521 shares underlying outstanding convertible notes. All outstanding shares of our ~~outstanding shares~~common stock are eligible for sale in the public market, subject in certain cases to the requirements of Rule 144 of the Securities Act of 1933, as amended ~~("Securities~~(the "Securities Act"). Also, shares issued upon exercise or conversion of outstanding stock options ~~warrants~~ and convertible notes are eligible for sale in the public market to the extent permitted by the provisions of the applicable stock option ~~warrant~~ and convertible note agreements and Rule 144, or if such shares have been registered ~~for resale~~ under the Securities Act. If these shares are sold, or if it is perceived that they may be sold, in the public market, the trading price of our common stock could decline.

As of ~~September 30, 2016, 15,941,860~~March 31, 2017, 12,969,485 shares of our common stock held by our co-founder and board member T. Boone Pickens ("Mr. Pickens") were pledged as security for loans made to Mr. Pickens. We are not a party to these loans. If the price of our common stock declines, Mr. Pickens may be forced to provide additional collateral for the loans or to sell shares of our common stock in order to remain within the margin limitations imposed under the terms of the loans. Any sales of our common stock following such a margin call that is not satisfied, or any other large sales of our common stock by our officers and directors, ~~such as Mr. Pickens' sale of 1,500,000 shares of our common stock in August 2016,~~ may cause the price of our common stock to decline.

A significant portion of our common stock is beneficially owned by a single stockholder whose interests may differ from yours and who is able to exert significant influence over our corporate decisions, including a change of control.

As of ~~September 30, 2016, our co-founder and board member T. Boone~~March 31, 2017, Mr. Pickens beneficially owned approximately ~~14.9%~~10.6% of our common stock (including ~~15,941,860~~12,969,485 outstanding shares of common stock, 725,000 shares underlying ~~exercisable~~outstanding stock options and ~~4,113,923~~2,531,645 shares underlying outstanding convertible ~~promissory~~ notes). As a result, Mr. Pickens is able to influence or control matters requiring approval by our stockholders, including the election of directors and mergers, acquisitions or other extraordinary transactions. Mr. Pickens may have interests that differ from yours and may vote in ~~a way~~ways with which you disagree and that may be adverse to your interests. This concentration of ownership may also have the effect of delaying, preventing or deterring a change of control of our Company, which could deprive our stockholders of an opportunity to receive a premium for their holdings of our common stock as part of a sale of our Company and ~~might~~could affect the market price of our common stock. Conversely, this concentration of ownership may facilitate a change of control at a time when you and other investors may prefer not to sell.

The price of our common stock may fluctuate significantly, and you could lose all or part of your investment.

The market price of our common stock has experienced, and may continue to experience, significant volatility. ~~Such~~This volatility may be in response to ~~various~~ factors ~~some of which~~that are beyond our control. In addition to the other factors discussed in these risk factors, factors that may cause volatility in the price of our common stock ~~price~~ include, among others:

Volatility in the supply, demand, use and ~~price~~prices of crude oil, gasoline, diesel, natural gas and other alternative vehicle fuels, including renewable diesel, biodiesel, ethanol, electricity and hydrogen;

The market's perception of a need for alternative vehicle fuels generally;

The market's perception of the benefits of natural gas relative to gasoline and diesel and other alternative vehicle fuels, including with respect to factors such as cost savings, supply and environmental and safety benefits;

Expected adoption of and growth ofin the market for natural gas as a vehicle fuel, and our ability to capture a substantial share of and enhance our leadership position within this ~~market, when and if it expands;~~market;

Development, commercial availability and adoption of ~~new~~ natural gas ~~engines~~vehicles, including for heavy-duty trucks and medium and light-duty applications, and the ~~U.S. heavy-duty truck market;~~factors that may impact these events, such as estimated incremental costs, annual fuel usage and annual fuel cost savings for vehicles using natural gas rather than gasoline or diesel;

Successful implementation of our business plans ~~including, without limitation, our ANGH initiative~~ and ~~our goal to fuel a substantial number of natural gas heavy-duty trucks;~~initiatives;

~~Continued difficulties producing RNG~~Failure to meet or exceed financial estimates and ~~other risks~~projections of the investment community, due to ~~our RNG business;~~

~~Investor perception of our industry or our prospects;~~

~~Fluctuations~~fluctuations in our operating ~~results;~~results or other factors;

~~Changes in our key personnel;~~

AIncreasing competition, as a significant number of established businesses, ~~including oil and gas companies, alternative vehicle and alternative fuel companies, refuse collectors, natural gas utilities and their affiliates and other organizations, some~~many of which have substantially greater financial, marketing and other resources than we have, have entered or are planning to enter the market for natural gas and other alternatives for use as vehicle fuels;

Other competitive developments, including ~~advancements~~advances or improvements in ~~conventional fuels and other alternative~~non-natural gas vehicle fuels or engines powered by these fuels;

Changes to the availability or effect on our business of environmental, tax or other regulations, programs or incentives that promote natural gas as a vehicle fuel, including, among others, VETC and ~~technologies, such as improvements in~~ the ~~efficiency, fuel economy~~programs under which we generate and sell LCFS Credits and RINs;

Adoption of government policies or ~~greenhouse~~programs that favor vehicles or vehicle fuels other than natural gas, ~~emissions of engines~~including long-standing support for ~~conventional~~gasoline and ~~alternative fuel~~diesel-powered vehicles and growing support for electric and hydrogen-powered vehicles;

Changes to emissions requirements ~~on traditional~~applicable to vehicles powered by gasoline, ~~and~~ diesel, ~~powered vehicles,~~natural gas or other vehicle fuels, as well as ~~on LNG and CNG production, fueling stations and fuel sales, and~~ the impact of emissions and other environmental regulations and pressures on crude oil and natural gas ~~supply;~~drilling, production, importing or transportation methods and fueling stations for these fuels;

The market's perception of the success and importance of our acquisitions, divestitures, investments or other strategic relationships or transactions;

Changes in political, regulatory, economic and market conditions;

Changes to ~~the availability~~our management, including officer or ~~impact of federal tax attributes, credits and incentives on our business;~~

~~Changes in general economic and market conditions.~~director departures or other changes;

Sales of our common stock by us or our officers, or directors or significant stockholders; and

A decline in the trading volume of our common stock.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies, ~~and in such instances,~~which have affected the market prices of these companies’ securities. These market fluctuations may also materially and adversely affect the market price of our common stock.

Item 2.—Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.—Defaults upon Senior Securities

None.

Item 4.—Mine Safety Disclosures

None.

Item 5.—Other Information

~~On October 31, 2016, we entered a Loan Modification Agreement with Plains solely for the purpose of extending the Credit Facility's maturity date from February 28, 2017 to September 30, 2018.~~None.

Item 6.—Exhibits

The information required by this Item 6 is set forth on the ~~exhibit index~~Exhibit Index that immediately follows the signature page to this report and is incorporated herein by reference.

SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	CLEAN ENERGY FUELS CORP.

Date: ~~November 3, 2016~~May 4, 2017	By:	/s/ ROBERT M. VREELAND
		Robert M. Vreeland
		Chief Financial Officer (Principal financial officer and duly authorized to sign on behalf of the registrant)

EXHIBIT INDEX



Exhibit Number		Description

~~10.115~~2.11+		~~Form of 7.5% Notes Exchange~~ Asset Purchase Agreement dated February 27, 2017, by and among Clean Energy Renewable Fuels, LLC, BP Products North America, Inc. and, solely with respect to Article VIII thereof, Clean Energy and BP Corporation North America, Inc., filed as Exhibit ~~10.115~~2.11 to registrant’s Current Report on Form 8-K filed on ~~July 15, 2016~~March 1, 2017 and incorporated herein by reference.

10.116*10.119		~~Loan Modification~~ Note Repurchase Agreement dated ~~October 31, 2016,~~February 6, 2017, by and between the ~~Registrant, Clean Energy~~Company and ~~PlainsCapital Bank.~~T. Boone Pickens, filed as Exhibit 10.119 to registrant’s Current Report on Form 8-K filed on February 6, 2017 and incorporated herein by reference.

10.120*		Form of Option Surrender Agreement

31.1*		Certification of Andrew J. Littlefair, President and Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Robert M. Vreeland, Chief Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by Andrew J. Littlefair, President and Chief Executive Officer, and Robert M. Vreeland, Chief Financial Officer.

101*		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2016,~~March 31, 2017, formatted in XBRL (eXtensible Business Reporting Language):

		(i) Condensed Consolidated Balance Sheets at December 31, ~~2015~~2016 and ~~September 30, 2016;~~March 31, 2017;
		(ii) Condensed Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended ~~September 30, 2015~~March 31, 2016 and ~~2016;~~2017;
		(iii) Condensed Consolidated Statements of Comprehensive ~~Loss~~Income for the Three ~~and Nine~~ Months Ended ~~September 30, 2015~~March 31, 2016 and ~~2016;~~2017;
		(iv) Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2015~~March 31, 2016 and ~~2016;~~2017; and
		(v) Notes to Condensed Consolidated Financial Statements.

* Filed herewith.

** Furnished herewith.

+ Schedules and exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K promulgated by the Securities and Exchange Commission. The registrant agrees to furnish a supplemental copy of any omitted schedules or exhibits to the Securities and Exchange Commission upon request.

5247



PART I.—FINANCIAL INFORMATION
Item 1.—Financial Statements (Unaudited)	34
Item 2.—Management’s Discussion and Analysis of Financial Condition and Results of Operations	2120
Item 3.—Quantitative and Qualitative Disclosures about Market Risk	32
Item 4.—Controls and Procedures	3233

PART II.—OTHER INFORMATION
Item 1.—Legal Proceedings	3934
Item 1A.—Risk Factors	3934
Item 2.—Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.—Defaults upon Senior Securities	5045
Item 4.—Mine Safety Disclosures	5045
Item 5.—Other Information	5045
Item 6.—Exhibits	5045



	Through December 31,		Three Months Ended September 30,		Nine Months Ended September 30,
(in 000s, except per-share amounts)	2015		2016		2016
Gross proceeds	$	6,943	$	16,066	$	69,113
Fees and issuance costs	$	493	386		1,728
Net proceeds	$	6,450	$	15,680	$	67,385
Shares issued	1,561,902		3,824,144		21,325,587



Description	Balance at December 31, 2015		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities(1):
Certificate of deposits	$	48,551	$	—	$	48,551	$	—
Municipal bonds and notes	16,790		—		16,790		—
Zero coupon bonds	499		—		499		—
Corporate bonds	37,104		—		37,104		—
Liabilities:
Warrants(2)	632		—		—		632



Description	Balance at September 30, 2016		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities(1):
Certificate of deposits	$	46,700	$	—	$	46,700	$	—
Municipal bonds and notes	14,462		—		14,462		—
Zero coupon bonds	429		—		429		—
Corporate bonds	15,722		—		15,722		—
Liabilities:
Warrants(2)	579		—		—		579



	Nine Months Ended September 30,
	2015		2016
Statement of Operations Data:
Revenue:
Product revenues	83.9	%	87.5	%
Service revenues	16.1		12.5
Total revenues	100.0		100.0
Operating expenses:
Cost of sales (exclusive of depreciation and amortization shown separately below):
Product cost of sales	65.7		56.8
Service cost of sales	8.0		6.3
Gain from change in fair value of derivative warrants	(0.4	)	0.0
Selling, general and administrative	32.8		25.5
Depreciation and amortization	15.2		14.9
Total operating expenses	121.3		103.5
Operating loss	(21.3	)	(3.5	)
Gain (loss) from extinguishment of debt, net	—		8.4
Interest expense, net	(11.3	)	(7.7	)
Other income (expense), net	1.3		0.0
Loss from equity method investments	(0.3	)	0.0
Loss before income taxes	(31.6	)	(2.8	)
Income tax benefit (expense)	(0.5	)	(0.4	)
Net loss	(32.1	)	(3.2	)
Loss from noncontrolling interest	0.3		0.4
Net loss attributable to Clean Energy Fuels Corp.	(31.8	)%	(2.8	)%



	Three Months Ended September 30,		Nine Months Ended September 30,		Through November 3,
(in millions)	2016		2016		2016
Gross proceeds	$	16.1	$	69.1	$	83.1
Fees and issuance costs	0.4		1.7		2.4
Net proceeds	$	15.7	$	67.4	$	80.7
Shares issued	3.8		21.3		24.5